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Questions and Answers
What is a sole proprietorship?
What is a sole proprietorship?
- A type of enterprise owned and run by one person (correct)
- A type of enterprise with no legal requirements
- A type of enterprise where the owner is not involved in the business operations
- A type of enterprise owned by multiple people
What distinguishes a sole proprietorship from other types of enterprises?
What distinguishes a sole proprietorship from other types of enterprises?
- It is exempt from taxation
- It is always a large-scale enterprise
- There is no legal distinction between the owner and the business entity (correct)
- It must have multiple owners
Can a sole trader work alone?
Can a sole trader work alone?
- Yes, but they cannot have any employees
- No, they are legally prohibited from employing others
- Yes, but they may also employ other people (correct)
- No, they must always work with a business partner
What is the legal distinction between the owner and the business entity in a sole proprietorship?
What is the legal distinction between the owner and the business entity in a sole proprietorship?
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Can a sole trader work alone?
Can a sole trader work alone?
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What is another name for a sole proprietorship?
What is another name for a sole proprietorship?
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Study Notes
Sole Proprietorship
- A sole proprietorship is a type of business owned and operated by one individual.
- It is distinguished from other types of enterprises in that the owner has complete control and responsibility for the business.
Key Characteristics
- A sole proprietor can work alone or hire employees, but the business is ultimately owned and managed by one person.
- There is no legal distinction between the owner and the business entity in a sole proprietorship, meaning the owner is personally responsible for all business debts and obligations.
Alternative Names
- Another name for a sole proprietorship is a sole trader.
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