Which of the Following Is False Regarding a Sole Proprietorship

question 58

Multiple Choice

Which of the following is false regarding a sole proprietorship?

• A) A sole proprietorship requires few legal formalities.
• B) A sole proprietor has complete control of the management of the business.
• C) The sole proprietor keeps all the profits from the business.
• D) Profits are taxed as the personal income of the sole proprietor.
• E) A sole proprietor is not personally liable for obligations of the business.

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Definitions:

Customer Base

The group of consumers who repeatedly purchase the goods or services of a business, fundamentally driving its revenue.

Market-Creating Innovation

Innovations that introduce new products or services, creating new demand and potentially new markets.

Lower-Income Segment

A portion of the population or market characterized by lower earnings, often targeted by businesses offering more affordable products or services.

Developing Economies

Countries that are in the process of industrialization, with relatively low per capita income and seeking to improve their economic base.