Which One of the Following Statements Is Correct with Respect

question 70

Multiple Choice

Which one of the following statements is correct with respect to sole proprietorships?

• A) The sole proprietor is responsible for the torts committed by an employee that take place during the course of business.
• B) The sole proprietor has limited liability.
• C) The sole proprietor need not adhere to any licensing and government regulations.
• D) The sole proprietor has the same extent of liability as a shareholder.
• E) The sole proprietor must consult with the other owners before making any major decisions regarding the business.

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Definitions:

Subrogation Clause

A provision in an insurance policy allowing the insurer to take legal action in the name of the insured against a third party responsible for the insured’s loss.

Property Damage

Physical harm or destruction to someone's tangible property caused by another's actions or negligence.

Occurrence

An event that happens or takes place, especially one of importance.

Declaratory Judgment

A court order that determines the rights of parties without ordering any specific action or awarding damages.