Which of the Following Is a Disadvantage of the Sole

question 21

Multiple Choice

Which of the following is a disadvantage of the sole proprietorship form of business organization?

• A) The proprietor is personally liable for all losses incurred by the proprietorship.
• B) The proprietor does not get to retain all profits of the business.
• C) The proprietorship suffers double taxation.
• D) Establishing the proprietorship requires more forms and other legal formalities than any other form of organization.

---

Definitions:

Quitclaim Deeds

Legal documents used to transfer a claim, interest, or right in property from one party to another without any assurance of the validity of the grantor's claim.

Technical Defects

Flaws or imperfections in a product that affect its operation, often due to errors in manufacturing or design.

Chain of Title

A historical record of all previous owners and transfers of a piece of property.

General Warranty Deed

A type of deed that provides the highest level of protection for the buyer, guaranteeing the property is free from all claims and liens.