While a Sole Proprietorship Gives the Owner Maximum Flexibility in Running

question 53

Multiple Choice

While a sole proprietorship gives the owner maximum flexibility in running the business,it also:

• A)makes the company a prime target for an acquisition or merger.
• B)creates a sense of isolation.
• C)makes it difficult to hire management talent to help grow the business.
• D)makes it difficult to sell.

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Definitions:

Profits Distribution

The allocation of a company's earnings to its shareholders, often in the form of dividends.

Capital Contributed

The amount of money or assets that shareholders have invested in a company.

Partnership Agreement

A legal document that outlines the rights, responsibilities, and shares of profits (or losses) among partners in a business venture.

Rights Of Partners

The entitlements and obligations held by partners in a partnership, including participation in profits, liabilities, and decision-making.