Which one of the following statements is correct with respect to sole proprietorships?
A)The sole proprietor has the same extent of liability as a shareholder.
B)The sole proprietor must consult with the other owners before making any major decisions regarding the business.
C)The sole proprietor is responsible for the torts committed by an employee that take place within the scope of employment.
D)The sole proprietor need not adhere to any licensing and government regulations.
E)The sole proprietor has limited liability.

Question

Quizplus · Accepted Answer

The sole proprietor is personally liable for the torts committed by an employee within the scope of employment. Options A, B, and D are incorrect. The sole proprietor has unlimited liability, and does not have other owners to consult with. They must adhere to licensing and government regulations. Option E is also incorrect, as the sole proprietor has unlimited liability.

Which One of the Following Statements Is Correct with Respect