One Disadvantage of a Sole Proprietorship as a Form of Business

question 96

Multiple Choice

One disadvantage of a sole proprietorship as a form of business organization is that

• A)sole proprietorships cannot lower the transaction costs associated with contracting with resource owners
• B)sole proprietorships are less efficient than corporations, because they are less specialized in production
• C)owners of sole proprietorships can lose all their personal assets if the business is sued or fails
• D)owners of sole proprietorships generally find it difficult to negotiate separation agreements with the other partners in the firm
• E)owners of sole proprietorships generally have very little control over how they operate their businesses