A sole proprietorship is characterized by:
A)separation of ownership and management.
B)mutual agency.
C)existence of multiple contracts.
D)unlimited liability.

Question

Quizplus · Accepted Answer

A sole proprietorship is a business owned and operated by one person, with no legal distinction between the owner and the business entity. This means that the owner is personally liable for all business debts and obligations, including any legal judgments or lawsuits. Consequently, the owner's personal assets, such as their home, car, and bank accounts, are at risk if the business faces financial difficulties or legal problems. This is known as unlimited liability, and it is a key characteristic of sole proprietorships. The other options (A, B, and C) are not accurate descriptions of this type of business structure.

A Sole Proprietorship Is Characterized By