Which of the following is an advantage of a sole proprietorship?

Which of the following is an advantage of a sole proprietorship?

• A. The ability to limit personal liability for business debts.
• B. The proprietor owns the entire business and receives all profits.
• C. The requirement to have multiple owners.
• D. The structured management system.

Answer: (B)

A sole proprietorship is a business structure where a single individual owns and operates the business. One of the key advantages of this structure is that the proprietor retains complete ownership of the business, allowing them to make all decisions independently. This ownership also extends to receiving all profits generated by the business, which can be particularly advantageous for the owner since they do not have to share earnings with partners or shareholders. This direct connection between the owner's efforts and profits can be motivating and financially rewarding, as the sole proprietor directly benefits from their hard work and business acumen. Additionally, the simplicity of managing all aspects of the business is appealing to many individuals considering entrepreneurship.

A sole proprietorship is a business structure where a single individual owns and operates the business. One of the key advantages of this structure is that the proprietor retains complete ownership of the business, allowing them to make all decisions independently. This ownership also extends to receiving all profits generated by the business, which can be particularly advantageous for the owner since they do not have to share earnings with partners or shareholders.

This direct connection between the owner's efforts and profits can be motivating and financially rewarding, as the sole proprietor directly benefits from their hard work and business acumen. Additionally, the simplicity of managing all aspects of the business is appealing to many individuals considering entrepreneurship.