Which of the following is a strength of a sole proprietorship?

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BlackTom AI · Accepted Answer

Question: Which of the following is a strength of a sole proprietorship?

Option 1: Unlimited life. This is incorrect as a strength because sole proprietorships typically have limited or no continuity; the business often dissolves when the owner dies or leaves. The legal entity is tied to the owner, so it does not have perpetual existence.

Option 2: Easy to form. This is the correct strength. Sole proprietorships are simple and inexpensive to establish with minimal regulatory hurdles, often requiring just local licenses and a business name registration. This ease of formation makes them attractive for individuals starting a small venture.

Option 3: Limited liability. This is false as a strength for sole proprietorships. In a sole proprietorship, the owner bears unlimited personal liability for business debts and obligations, putting personal assets at risk. This is a major disadvantage rather than a strength.

Option 4: Limited access to capital. This is incorrect as a strength; in fact, lack of access to capital is a common weakness for sole proprietorships because they rely largely on the owner's personal funds and may face constraints in obtaining loans or attracting outside investment.

Summary: Among the options, only Easy to form describes a practical strength of a sole proprietorship, while the others refer to vulnerabilities or mischaracterizations of the structure.

Which of the following is a strength of a sole proprietorship?单项选择题

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Choose the correct answer from the below about sole trader

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