Which one of the following statements concerning a sole proprietorship is correct? A sole proprietorship is the least common form of business ownership. The profits of a sole proprietorship are taxed twice. The owners of a sole proprietorship share profits as established by the partnership agreement. The owner of a sole proprietorship may be forced to sell his/her personal assets to pay company debts.

Question

Social Studies

Asher Coffey

9 April, 15:45

Which one of the following statements concerning a sole proprietorship is correct? A sole proprietorship is the least common form of business ownership. The profits of a sole proprietorship are taxed twice. The owners of a sole proprietorship share profits as established by the partnership agreement. The owner of a sole proprietorship may be forced to sell his/her personal assets to pay company debts.

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Answers (1)

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Natalie Bell · Answer 1

The correct answer is D. The owner of a sole proprietorship may be forced to sell his/her personal assets to pay company debts.

Explanation:

Sole proprietorship occurs as one business or enterprise is owned by only one person, this is the opposite of co-ownership in which two or more individuals own an enterprise and therefore all the parties participate in the shares, debts, responsibilities, and others of the company.

Additionally, in a sole proprietorship, the owner would receive all profits of the company or enterprise but also as this person is responsible for everything including the debts and this implies he or she might be forced to sell personal assets to pay company debts. Thus, the statement that is correct about a sole proprietorship is "The owner of a sole proprietorship may be forced to sell his/her personal assets to pay company debts".