Which one of the following is a correct statement concerning a sole proprietorship?
A) A sole proprietorship is relatively diﬃcult to form.
B) The proﬁts earned by a sole proprietorship are subject to double taxation.
C) A sole proprietorship is more highly regulated than a corporation.
D) The losses incurred by a sole proprietor are limited to the amount invested in the ﬁrm.
E) It may be diﬃcult to transfer the ownership of a sole proprietorship.

Question

Quizplus · Accepted Answer

A sole proprietorship is owned and operated by a single individual, which makes it difficult to transfer ownership interests. The proprietorship is not a separate legal entity, and the owner has unlimited liability for the firm's debts and obligations. A sole proprietorship is among the easiest business to establish, has no double taxation, and is less regulated than a corporation. However, the proprietorship's losses are not limited to the amount invested in the firm, but the owner's personal assets are also at risk.

Which One of the Following Is a Correct Statement Concerning