Which of the following statements is true about the form of business known as a sole proprietorship?

Which of the following statements is true about the form of business known as a sole proprietorship?

• A. A sole proprietorship is more complicated to set up than other forms of business.
• B. The owner of a sole proprietorship makes all of the decisions about the business.
• C. In a sole proprietorship, an owner shares financial responsibility with one or more partners.
• D. In a sole proprietorship, a business owner shares financial responsibility with shareholders.

Answer: (B)

The statement that the owner of a sole proprietorship makes all of the decisions about the business is true because, in this type of business structure, there is a single owner who has complete control over business operations. This means the owner is responsible for all aspects of the business, including its strategy, management, and financial decisions. In a sole proprietorship, there is no need to consult with partners or shareholders, which simplifies decision-making and allows for quick implementation of ideas. Other structures, such as partnerships or corporations, involve multiple individuals, which can complicate decision-making processes and require consensus among various parties. This autonomy is a key advantage of a sole proprietorship, making it appealing for many entrepreneurs looking for a straightforward way to manage their business.

The statement that the owner of a sole proprietorship makes all of the decisions about the business is true because, in this type of business structure, there is a single owner who has complete control over business operations. This means the owner is responsible for all aspects of the business, including its strategy, management, and financial decisions. In a sole proprietorship, there is no need to consult with partners or shareholders, which simplifies decision-making and allows for quick implementation of ideas.

Other structures, such as partnerships or corporations, involve multiple individuals, which can complicate decision-making processes and require consensus among various parties. This autonomy is a key advantage of a sole proprietorship, making it appealing for many entrepreneurs looking for a straightforward way to manage their business.