Understanding Sole Proprietorships

Quiz
•
Others
•
11th Grade
•
Medium
Divya Bajaj
Used 2+ times
FREE Resource
10 questions
Show all answers
1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is a sole proprietorship?
A sole proprietorship is a partnership between two or more people.
A sole proprietorship is a corporation with limited liability.
A sole proprietorship is a business owned and operated by one person, with unlimited personal liability.
A sole proprietorship is a type of franchise owned by multiple investors.
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What are the advantages of a sole proprietorship?
Advantages of a sole proprietorship include ease of setup, full control, direct taxation, and minimal regulatory burden.
Complex tax structure
Limited liability protection
High regulatory requirements
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What are the disadvantages of a sole proprietorship?
High level of expertise required
Disadvantages include unlimited personal liability, difficulty in raising capital, lack of continuity, and limited expertise.
Limited personal liability
Easy to raise capital
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How is a sole proprietorship taxed?
A sole proprietorship is taxed on the owner's personal tax return as pass-through income.
A sole proprietorship is not subject to any taxes.
A sole proprietorship is taxed as a corporation.
A sole proprietorship pays a flat tax rate of 15%.
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What legal requirements are needed to start a sole proprietorship?
File for a trademark before starting
Choose a business name, register it, obtain licenses/permits, and comply with local laws.
Register as a corporation instead
Create a partnership agreement
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Can a sole proprietorship have employees?
Yes, a sole proprietorship can have employees.
A sole proprietorship must operate without any staff.
Only corporations can have employees.
No, a sole proprietorship cannot have employees.
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the difference between a sole proprietorship and a partnership?
A sole proprietorship is a type of partnership with shared responsibilities.
A sole proprietorship is owned by one person, while a partnership is owned by two or more people.
A sole proprietorship can have multiple owners, while a partnership is limited to one owner.
Both sole proprietorships and partnerships are owned by corporations.
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