Selma owns a roofing business. She enjoys being her own boss, but her satisfaction comes at a price. Her days are filled with organizing the activities of her employees and soliciting new customers. She often misses activities with friends and family because of the obligations of running her own business. She also knows that she has unlimited personal liability for any of her firm's debts. Selma's business is organized as a(n):
A) joint venture.
B) C corporation.
C) S corporation.
D) sole proprietorship.

Question

Quizplus · Accepted Answer

Selma's unlimited personal liability for her business's debts indicates that she is operating as a sole proprietorship. Joint ventures involve multiple parties sharing ownership and control of a business, a C corporation has limited liability for its owners (shareholders), and an S corporation is a type of corporation that passes income, losses, deductions, and credits through to its shareholders for tax purposes.

Selma Owns a Roofing Business