Sole proprietorships are often used at which stage of a firm's life?
A)After a partnership
B)At the early stages
C)As the number of employees increases
D)When the company goes public

Question

Quizplus · Accepted Answer

Sole proprietorships are often used at the early stages of a firm's life, when there are not many employees and the owner wants to maintain full control over the business. As the company grows and there are more employees, it may become necessary to switch to a different legal structure, such as a corporation, to accommodate the increased complexity of the business. After a partnership is not the correct answer because a partnership involves multiple owners, not just one individual. Going public is also not the correct answer because that refers to a process of selling shares of a business to the public through an initial public offering (IPO), which can only be done by a corporation.

Sole Proprietorships Are Often Used at Which Stage of a Firm's