The drawback(s)of proprietorship include:
A) the unlimited liability of the partners
B) conflicts with partners
C) tax responsibilities
D) difficulty in obtaining financing
E) complexity and cost.

Question

Quizplus · Accepted Answer

Difficulty in obtaining financing is the biggest drawback of proprietorship, especially for those who have limited personal funds or collateral. Banks and other financial institutions typically prefer to lend to larger, established businesses with multiple owners or a predictable cash flow. This can make it extremely challenging for a sole proprietor to get the funding they need to grow their business. Other drawbacks such as tax responsibilities and unlimited liability can be managed through careful planning, but the inability to secure financing can severely limit a proprietor's ability to achieve their business goals.

The Drawback(s)of Proprietorship Include