In which of the following organizations would the existence of agency problems be least likely?

Question

Quizplus · Accepted Answer

In a sole proprietorship, there is no separation between the owner and the business, so agency problems are less likely to arise. The owner has complete control over the business and its operations, which reduces the potential for conflicts of interest. In contrast, partnerships and corporations have multiple owners or shareholders, which can lead to agency problems as different parties may have varying interests and objectives. Additionally, closely held corporations may also face agency problems if there is a significant power imbalance between the majority and minority shareholders.

In Which of the Following Organizations Would the Existence of Agency