A primary reason to open a business as a sole proprietorship instead of forming a corporation for business ownership is that:
A) a sole proprietorship provides limited liability for the owner.
B) it is easier to obtain bank and small business loan funding as a sole proprietorship.
C) finding managers is easier in a sole proprietorship
D) a sole proprietorship avoids double taxation of the owner and business.

Question

Quizplus · Accepted Answer

The primary reason to open a business as a sole proprietorship instead of forming a corporation for business ownership is that a sole proprietorship avoids double taxation of the owner and business. In a corporation, the profits are taxed at the corporate level and then again at the individual owner level when they receive their share of the profits. With a sole proprietorship, there is only one level of taxation, which can lead to significant tax savings for the owner.

A Primary Reason to Open a Business as a Sole