what are the following are benefits enjoyed by sole proprietships?select two correct answers
The benefits enjoyed by sole proprietorships are:
1. Complete control: Sole proprietors have complete control over their business operations, which means they can make decisions quickly and easily without having to consult with anyone else.
2. Tax benefits: Sole proprietors enjoy tax benefits as they are not required to pay corporate taxes. Instead, they report their business income and expenses on their personal tax returns, which can result in lower tax rates.
Other benefits of sole proprietorships include ease of formation, flexibility, and minimal legal requirements. However, the two correct answers to the question are complete control and tax benefits.
There are several benefits enjoyed by sole proprietorships. Here are two correct answers:
1. Ease of formation: Sole proprietorships are the simplest form of business to set up. They do not require any formal legal filings or complicated registration processes. This simplicity makes it easy for an individual to start their own business quickly and with minimal cost.
2. Full control and decision-making power: As the sole owner of the business, a proprietor has complete control over all decisions and operations. They do not have to consult or seek approval from any other partners or shareholders. This level of autonomy allows for quick decision-making and flexibility in running the business.
It's worth noting that while these are advantages of sole proprietorships, there are also some limitations and risks associated with this business structure.
To determine the benefits enjoyed by sole proprietors, we need to understand what a sole proprietorship is.
A sole proprietorship is an unincorporated business owned and operated by a single individual. This type of business structure has the following benefits:
1. Simple and Easy to Set Up: One of the major advantages of a sole proprietorship is its simplicity. There are minimal legalities and paperwork involved in establishing a sole proprietorship, making it relatively easy and inexpensive to set up compared to other business structures.
2. Complete Control: As a sole proprietor, you have complete control and autonomy over all decision-making within your business. This allows for quick and efficient decision-making without the need for consultation or approval from others.
Other potential benefits that are not specific to sole proprietorships include:
3. Direct Profits: Sole proprietors exclusively receive all profits generated by the business. Unlike other business structures, there is no need to share profits with partners or shareholders.
4. Flexibility: Sole proprietors have the advantage of flexibility in running their business. They can make changes to their products, services, or business operations without having to consult or seek approval from others.
5. Privacy: Sole proprietorships offer a certain level of privacy since the business owner operates under their personal name and has limited disclosure requirements compared to larger business structures.
Remember, the question asks for two correct answers. Therefore, the benefits of a sole proprietorship that are commonly identified include Simple and Easy to Set Up and Complete Control.