Which of the following statements is the most accurate? Sole proprietorships:
A) Are well suited for people who want to own a business and share in its profits without taking an active role in management.
B) Are taxed at the owner's personal tax rate.
C) Is the least risky form of business ownership.
D) Must receive a state charter before they can legally conduct business.

Question

Quizplus · Accepted Answer

Sole proprietorships are taxed at the owner's personal tax rate, as the business itself is not a separate legal entity for tax purposes. Option A is incorrect as sole proprietors have to take an active role in running their business. Option C is incorrect as sole proprietorships carry unlimited personal liability, making them riskier than other forms of ownership. Option D is incorrect as sole proprietorships do not require a state charter to operate, although they may need to register with local or state authorities for licenses and permits.

Which of the Following Statements Is the Most Accurate? Sole