What is the chief disadvantage of the sole proprietorship as a form of business organization when compared to the corporate form?
A) Sole proprietorships are subject to double taxation of profits.
B) The cost of formation.
C) Inadequate profit sharing.
D) Owners have unlimited liability.

Question

Quizplus · Accepted Answer

The chief disadvantage of the sole proprietorship as a form of business organization when compared to the corporate form is that owners have unlimited liability. This means that the owner's personal assets are not protected in case of business debts or lawsuits. In the corporate form, shareholders have limited liability, which means that they are only responsible for the amount they have invested in the company.

What Is the Chief Disadvantage of the Sole Proprietorship as a Form