The Most Significant Disadvantage of Using a Sole Proprietorship Is

question 28

Multiple Choice

The most significant disadvantage of using a sole proprietorship is that

• A)the sole proprietor alone must do all the work in the sole proprietorship business.
• B)the sole proprietor has unlimited personal liability for all obligations of the business.
• C)the sole proprietor must obtain a business licence.
• D)the sole proprietor must register a business name.
• E)it is simple to terminate.

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Definitions:

Federal Deposit Insurance

A government guarantee that protects bank depositors' funds up to a certain limit in case of a bank failure.

Bank Panics

Events in which a large number of bank customers withdraw their deposits simultaneously due to fears that the bank will become insolvent.

Money Supply

The total amount of money available in an economy at a particular point in time, including cash, bank deposits, and other liquid assets.

Interest Rate

The percentage of a sum of money charged for its use, usually expressed on an annual basis.