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)becomes the property of the most senior employee who wishes to continue operating the firm.
D)ceases to exist unless sold or taken over by Mehdi's heirs.

Question

Quizplus · Accepted Answer

As a sole proprietorship, the business is not a separate legal entity from its owner. Therefore, if the owner becomes incapacitated, there is no one who can legally continue to operate the business without the owner's consent. The business will terminate upon the owner's death or incapacitation, unless it is sold or taken over by the owner's heirs.

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