Question: Which of the following is NOT a characteristic of a sole proprietorship?
Options:
Single ownership
Unlimited liability
Separate legal entity
Full control over business decisions
Correct Answer: Separate legal entity
Solution:
A sole proprietorship is not a separate legal entity; the owner and the business are legally the same.
Which of the following is NOT a characteristic of a sole proprietorship?
Practice Questions
Q1
Which of the following is NOT a characteristic of a sole proprietorship?
Single ownership
Unlimited liability
Separate legal entity
Full control over business decisions
Questions & Step-by-Step Solutions
Which of the following is NOT a characteristic of a sole proprietorship?
Step 1: Understand what a sole proprietorship is. It is a type of business owned and run by one person.
Step 2: Know that in a sole proprietorship, the owner and the business are considered the same legal entity.
Step 3: Identify characteristics of a sole proprietorship, such as unlimited liability, complete control by the owner, and no separate taxes for the business.
Step 4: Recognize that a characteristic NOT associated with a sole proprietorship is being a separate legal entity.
Step 5: Conclude that the answer to the question is that a sole proprietorship is NOT a separate legal entity.
No concepts available.
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