Question

Which of the following is an advantage of a sole proprietorship?

a. It is easy to expand if it succeeds.
b. It faces few government rules.
c. It is easy to get financing to start one.
d. It has the lowest federal income taxes.

Answer 1

An advantage of a sole proprietorship is B. IT FACES FEW GOVERNMENT RULES.

Compared with corporations, establishing a sole proprietorship business has lesser government requirements. This is because the sole proprietorship business is an extension of the owner. Any assets and liabilities the sole proprietorship has is also the assets and liabilities of the owner. There is no separation of juridical entity.