Sole Proprietorship Quiz
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Questions and Answers

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?

  • 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?

  • 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?

    <p>There is no legal distinction between the owner and the business entity in a sole proprietorship.</p> Signup and view all the answers

    Can a sole trader work alone?

    <p>A sole trader does not necessarily work alone and may employ other people.</p> Signup and view all the answers

    What is another name for a sole proprietorship?

    <p>A sole proprietorship is also known as a sole tradership or individual entrepreneurship.</p> Signup and view all the answers

    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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    Description

    Test your knowledge about sole proprietorships with this quiz. Explore the characteristics, advantages, and disadvantages of this business structure.

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