Question

Arianne has a passion for designing clothes and decides to open her own clothing store. she starts it by taking personal loans from family and friends, and hires a few people to run the store she maintains a tight control over costs as she does not want to incur further debts. arianne's store is an example of a

Answer 1

Arianne's store is an example of Sole Proprietorship.

Sole Proprietorship is a business that is solely run by one person who is the owner of the company. He is responsible for all the liabilities of the company, yet the receiver of profits solely. The person who starts the business hires his team and get the activities of the business done by them with him. He is the one liable/receiver of all losses and profits.

In this example, Arianne is the owner of the business who hires employees to run her business. She is the Sole Proprietor.

Answer 2

Arianne's store is an example of a SOLE PROPRIETORSHIP.

A sole proprietorship is the simplest business form among all businesses. It doesn't have a legal entity because its debts will be personally covered by its owner. All its profit and loss will be enjoys and paid for by Arianne and the coverage of its debts is unlimited.