All of the following statements about management of a sole proprietorship is correct except
A) The sole proprietor has sole discretion to bind the business.
B) The sole proprietor has no oversight committees.
C) The sole proprietor has a fiduciary duty to the employees.
D) The sole proprietor may change to another form of entity at the sole proprietor's will.

Question

Quizplus · Accepted Answer

The sole proprietor does not have a fiduciary duty to the employees in the same way that directors of a corporation have a fiduciary duty to their shareholders. A fiduciary duty typically involves a relationship of trust and a duty to act in the best interest of another party. In the context of a sole proprietorship, the owner may have ethical or moral obligations to treat employees well, but this does not constitute a fiduciary duty in the legal sense.

All of the Following Statements About Management of a Sole