Which of the following is an advantage to operating a business as a sole proprietorship?

Question

Quizplus · Accepted Answer

As a sole proprietor, the business owner has the right to receive all of the business's profits. This is because the business is not a separate legal entity, but instead, the owner and the business are seen as one and the same. This means that any profits earned by the business are considered the owner's personal income.

B) Unlimited access to the capital market is not an advantage of operating a business as a sole proprietorship because sole proprietors have limited options for accessing capital as they cannot issue stocks or shares like corporations.

C) Limited liability is not an advantage of operating a business as a sole proprietorship because, in this type of business, the owner is personally responsible for all of the business's debts and legal obligations. This means that the owner's personal assets, such as their home or car, may be at risk if the business is sued or unable to repay its debts.

D) Exemption from tax is not an advantage of operating a business as a sole proprietorship because, like all businesses, sole proprietors must pay taxes on their profits. Sole proprietors report their business income on their personal tax returns and pay taxes at their personal tax rate.

Which of the Following Is an Advantage to Operating a Business