A key reason most sole proprietorships remain relatively small is that:
A) they have limited ability to raise funds needed to finance growth.
B) they involve extensive paperwork and incur heavy costs.
C) heavy taxes are levied directly on their earnings as a business.
D) their stockholders would rather receive dividends than have earnings reinvested to finance growth.

Question

Quizplus · Accepted Answer

Sole proprietorships are operated by one individual who is responsible for all aspects of the business, including financing. Since they do not have the ability to sell stock or attract investors, raising funds can be a challenge, limiting their ability to finance growth. As a result, many sole proprietorships remain relatively small.

A Key Reason Most Sole Proprietorships Remain Relatively Small Is