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

Responses

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

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

The owner of the sole proprietorship must report to shareholders.
The owner of the sole proprietorship must report to shareholders.

A sole proprietorship is the simplest form of business organization.

1 answer

The statement that is true about sole proprietorships is:

A sole proprietorship is the simplest form of business organization.

To clarify the other statements:

  • The owner of the sole proprietorship has limited liability. (False: The owner has unlimited liability.)
  • A sole proprietorship can continue if the owner dies. (False: The business typically ceases to exist upon the owner's death.)
  • The owner of the sole proprietorship must report to shareholders. (False: Sole proprietorships do not have shareholders.)