Which of the following is not one of the advantages of a sole proprietorship?Multiple Choiceease and cost of formationsecrecyflexibility and control of the businessunlimited liability
Question
Which of the following is not one of the advantages of a sole proprietorship?Multiple Choiceease and cost of formationsecrecyflexibility and control of the businessunlimited liability
Solution
The correct answer is "unlimited liability". This is not an advantage of a sole proprietorship. In fact, it's a major disadvantage. In a sole proprietorship, the owner is personally liable for all the business's debts. This means that if the business can't pay its debts, the owner's personal assets could be used to pay them. This is different from a corporation, where the owners are typically only liable up to the amount they invested in the business.
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