Week 5(2nd Quarter) Class Flashcard: Sole Proprietorship

Front

What is a sole proprietorship?

Back

A business owned by a single individual

Front

What is one of the main advantages of a sole proprietorship?

Back

Full control by the owner

Front

Which of the following best describes liability in a sole proprietorship?

Back

The owner has unlimited liability.

Front

How is income from a sole proprietorship taxed?

Back

It is taxed as personal income of the owner.

Front

Which of the following is NOT a characteristic of a sole proprietorship? A. Unlimited liability B. Easy to form and dissolve D. Full control by the owner

Back

Ownership can easily be transferred

Front

What is one disadvantage of a sole proprietorship?

Back

The business has a limited lifespan tied to the owner.

Front

What happens to a sole proprietorship when the owner dies?

Back

The business ceases to exist.

Front

In a sole proprietorship, who is responsible for business debts?

Back

The owner personally.

Front

What is one reason a person might choose a sole proprietorship over other business types?

Back

To have more control over decisions.

Front

Which of the following is a benefit of sole proprietorship in terms of taxes? A. The business income is taxed separately from the owner’s income B. There is only one level of tax, on the owner’s personal income C. The business is tax-exempt D. The owner can avoid paying any tax on profits

Back

There is only one level of tax, on the owner’s personal income