Joe Jackson operates a sole proprietorship, but he is in poor health and may be unable to continue running the business. If Joe becomes incapacitated, his business:
A) automatically continues under new management as a sole proprietorship.
B) automatically converts into a public corporation with stock sold to interested investors.
C) ceases to exist unless sold or taken over by Joe's heirs.
D) becomes the property of the most senior employee who wishes to continue operating the firm.

Question

Quizplus · Accepted Answer

In the case of a sole proprietorship, the business is owned and operated solely by one individual. If that individual becomes incapacitated and is unable to continue running the business, the business may cease to exist unless it is sold or taken over by Joe's heirs. The business does not automatically continue under new management as a sole proprietorship, nor does it automatically convert into a public corporation or become the property of the most senior employee.

Joe Jackson Operates a Sole Proprietorship, but He Is in Poor