Which of the following is a valid difference between sole proprietorship and partnership?
A)Partnerships require a written agreement while sole proprietorships do not.
B)Partnerships require a state charter while sole proprietorships do not.
C)Partnerships generate lower profits than sole proprietorships.
D)Partnerships are characterized by unlimited liability, while sole proprietorships are not.
E)Partnerships consist of two or more partners sharing the responsibility of the firm, while sole proprietorship consists of a single individual.

Question

Quizplus · Accepted Answer

The valid difference between sole proprietorship and partnership is that partnerships consist of two or more partners sharing the responsibility of the firm, while sole proprietorship consists of a single individual. A is incorrect because partnerships may require a written agreement, but it is not a requirement for establishment. B is incorrect because both sole proprietorship and partnership do not require a state charter. C is incorrect because it is not true for all businesses. D is incorrect because both sole proprietorship and partnership have unlimited liability.

Which of the Following Is a Valid Difference Between Sole