Q. 4SE
Question
You would like to start a cellular telephone equipment service business. You are considering organizing the business as a sole proprietorship. Identify the advantages and disadvantages of owning a sole proprietorship.
Step-by-Step Solution
Verified Answer
The advantage of sole proprietorship includes a single owner and it does not require sharing of profits with anyone. Disadvantages include termination of the organization and personal liability of the owner.
1Step1: Explanation on Sole Proprietorship
Sole proprietorship is one of the forms of business organization in which there is only one owner.
2Step2: Advantages and disadvantages
Advantages are as follows:
- There is only a single owner of the business who receives all profits.
- The profits are not shared with anyone in the organization.
Disadvantages are as follows:
- It can be terminated at the death of the owner or at the will of the owner.
- The personal property of the owner can be used to repay the debts of the businesses.
Other exercises in this chapter
Q. 2SE
Suppose you are starting a business, Wholly Shirts, to imprint logos on T-shirts. In organizing the business and setting up its accounting records, you take you
View solution Q. 3SE
Chloe Michaels plans on opening Chloe Michaels Floral Designs. She is considering the various types of business organizations and wishes to organize her busines
View solution Q5SE
Michael McNamee is the proprietor of a property management company,Apartment Exchange, near the campus of Pensacola State College. The business has cash of \(8,
View solution AB-6SE
Recording transactions in a cash receipts journal___________________________________________________________________Jul. 5 Sold merchandise inventory for cash,
View solution