A proprietorship is a type of business organization in which the owner is personally responsible for the firm's debts. This means that the owner's personal assets could be used to pay off the business's debts in the case of bankruptcy or other financial difficulties. This makes it a risky choice for many entrepreneurs.

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A Proprietorship Is

Question 84

Multiple Choice

A proprietorship is

A) difficult to form.
B) taxed twice-once when it pays business taxes and again when its owner pays personal income taxes.
C) not often found in developed economies, in which corporations have become the most common form of business organization.
D) risky for its owner, who is personally responsible for the firm's debts.

Correct Answer: