Loose Leaf for Foundations of Financial Management Format: Loose-leaf
17th Edition
ISBN: 9781260464924
Author: BLOCK
Publisher: Mcgraw Hill Publishers
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Question
Chapter 1, Problem 3DQ
Summary Introduction
To Explain: The major advantages and drawbacks of a sole proprietorship.
Introduction:
Sole proprietorship:
A business entity owned and operated by one person is a sole proprietorship entity. It is not a separate legal entity and is neither required to be registered nor incorporated. The type of business opted by a sole trader is usually a small or medium one.
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Chapter 1 Solutions
Loose Leaf for Foundations of Financial Management Format: Loose-leaf
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- 1 If an individual forms a sole proprietorship, which nontax factor will be of greatest benefit to the sole proprietor? Group of answer choices Ease of startup Speed of raising capital Protects owners from liability of business All of the abovearrow_forwardWhich characteristic of a corporation is a disadvantage? a. Mutual agency b. Double taxation c. Limited liability d. None are disadvantages.arrow_forwardWhich type of business will most likely have problems with insufficient funds for business?  A)Partnerships B)LLCs C)Corporations D)Sole proprietorshiparrow_forward
- 1 What financial arguments could you use to justify your proposedrecommendations to segregate FLTs and the workers?arrow_forwardIs forming a corporation does not have the same advanatges as forming an LLC, but the cost are likely to be higher?   Please answer immediately :) Thank youarrow_forwardExplain Sole Proprietorships?arrow_forward
- In your words, explain special types of Business ownership. Also, explain when and why would you want to choose each one of them. In what situation you might want to change the ownership from one form to another?  *Please type don't writearrow_forwardWhich of the following is NOT the weaknesses of sole proprietorship? Manakah di antara berikut BUKAN kelemahan perniagaan milikan tunggal?   Select one: A. Limited skills and capability /Keupayaan dan kemahiran terhad  B. Do not have proper financial record /Tidak memiliki rekod kewangan yang baik  C. Unlimited liability /Liabiliti tidak terhad  D. Business information can be kept confidential /Maklumat perniagaan tidak perlu didedahkanarrow_forwardIn your everyday consumer interactions, would you rather do business with a sole proprietorship or a corporation? Why?arrow_forward
- Which of the following is true about this statement: "In a sole proprietorship, the owner's personal assets are at risk if the business is not successful." Is this true? Â a) No, personal assets are protected by sole proprietorship laws. Â b) Yes, there is no protection for personal assets with sole proprietorships. Â c) No, personal assets are only at risk with corporations. Â d) Yes, this is true for all forms of business.arrow_forwardIf you are concerned about unlimited liability, what other types of ownership structures could you pursue for your small business?arrow_forwardCompare the potential for agency problems in sole proprietorships, partnerships, and corporations. In light of your analysis, why is the corporate form of organizations so popular?arrow_forward
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