Which of the following is a disadvantage of a sole proprietorship?
A) A sole proprietorship is difficult to form because of the extensive paperwork and costs involved.
B) The owner of a sole proprietorship has to manage the business in accordance with the directions of the board of directors.
C) A sole proprietorship is subjected to double taxation of its earnings.
D) A sole proprietorship lacks permanence because it is just an extension of its owners.

Question

Quizplus · Accepted Answer

A sole proprietorship is dependent on the owner's life and cannot exist independently. If the owner dies or is incapacitated, the business may be forced to shut down or undergo significant changes in management.

Which of the Following Is a Disadvantage of a Sole