Which of the following is NOT an advantage of a sole proprietorship?
A) It is easy and inexpensive to create.
B) It gives the owner 100 percent of the company and 100 percent of the profits and responsibility for the losses.
C) The income from the business is taxed at a rate lower than the owner's personal income tax rate.
D) The owner has complete authority to make decisions about the direction of the business.
E) There are no major reporting requirements such as those imposed on corporations.

Question

Which of the following is NOT an advantage of a sole proprietorship?
A) It is easy and inexpensive to create.
B) It gives the owner 100 percent of the company and 100 percent of the profits and responsibility for the losses.
C) The income from the business is taxed at a rate lower than the owner's personal income tax rate.
D) The owner has complete authority to make decisions about the direction of the business.
E) There are no major reporting requirements such as those imposed on corporations.

Quizplus · Accepted Answer

The income from a sole proprietorship is taxed at the owner's personal income tax rate, not at a lower rate. This means that the profits from the business are included in the owner's personal income and taxed accordingly.

Which of the Following Is NOT an Advantage of a Sole