A significant disadvantage of owning a sole proprietorship is the:
A)overwhelming time commitment often required of the owner.
B)possibility of limited liability.
C)lack of incentives to motivate the owner.
D)heavy tax liability that must be assumed.

Question

Quizplus · Accepted Answer

Sole proprietors are responsible for all aspects of their business, including operations, finances, and management. This can require a significant amount of time and effort from the owner, which can be a downside for those who value work-life balance. As the sole proprietor is also personally liable for any debts or legal issues that arise from the business, there is also a potential risk to personal assets, making it a disadvantage in terms of liability. However, there is no heavy tax liability that must be assumed, and there can be incentives to motivate the owner as they have complete control over the business.

A Significant Disadvantage of Owning a Sole Proprietorship Is The