Question

Which of the following statements is true about sole proprietorships?(1 point)
Responses

A sole proprietorship is the simplest form of business organization.
A sole proprietorship is the simplest form of business organization.

A sole proprietorship can continue if the owner dies.
A sole proprietorship can continue if the owner dies.

The owner of the sole proprietorship has limited liability.
The owner of the sole proprietorship has limited liability.

The owner of the sole proprietorship must report to shareholders.

Answer 1

The true statement about sole proprietorships is:

**A sole proprietorship is the simplest form of business organization.**

The other statements are false:

- A sole proprietorship does not continue if the owner dies; it ceases to exist unless there are provisions for transferring its assets.
- The owner of a sole proprietorship has unlimited liability, meaning they are personally responsible for all the business's debts.
- The owner of a sole proprietorship does not report to shareholders, as there are no shareholders in this type of business structure.