Mehdi operates a sole proprietorship,but he is in poor health and may be unable to continue running the business.If Mehdi becomes incapacitated,his business:
A)automatically continues under new management as a sole proprietorship.
B)automatically converts into a public corporation with stock sold to interested investors.
C)ceases to exist unless sold or taken over by Mehdi's heirs.
D)becomes the property of the most senior employee who wishes to continue operating the firm.

Question

Quizplus · Accepted Answer

As a sole proprietorship, the business is not a separate legal entity from Mehdi. If he becomes incapacitated, the business cannot continue to operate unless it is sold or taken over by Mehdi's heirs. There is no automatic transfer of ownership or management in a sole proprietorship.

Mehdi Operates a Sole Proprietorship,but He Is in Poor Health