Which of the Following Is a Serious Drawback of Sole

question 27

Multiple Choice

Which of the following is a serious drawback of sole proprietorships?

• A) They are heavily regulated by the federal government.
• B) They expose their owners to unlimited liability for the company's debts.
• C) They are difficult and inexpensive to form.
• D) They result in double taxation of the company's earnings.

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Definitions:

Income Level

A measurement of the amount of money received on a regular basis, typically used for assessing socioeconomic status.

Negative Correlation

A relationship between two variables in which one variable increases as the other decreases, and vice versa.

Inverse Relationship

A relationship between two variables wherein one variable increases as the other decreases, and vice versa.

Economic Status

The social standing or class of an individual or group often measured by income, wealth, education, and occupation.