Agency problems are least likely to arise in which organizational form?
A) Sole proprietorship
B) Limited partnership
C) Corporation
D) Subchapter S corporation

Question

Quizplus · Accepted Answer

In a sole proprietorship, there is only one owner who has complete control over the business and is responsible for all decisions and actions. As there are no separate owners, there is no scope for agency problems to arise. In other forms of organization, where ownership is dispersed among multiple parties or there is a separation between ownership and management, there is a greater likelihood of agency problems.

Agency Problems Are Least Likely to Arise in Which Organizational