Which of the following statements is true about sole proprietorships?(1 point) Responses A sole proprietorship can continue if the owner dies. A sole proprietorship can continue if the owner dies. A sole proprietorship is the simplest form of business organization. A sole proprietorship is the simplest form of business organization. The owner of the sole proprietorship must report to shareholders. The owner of the sole proprietorship must report to shareholders. The owner of the sole proprietorship has limited liability.
A sole proprietorship is the simplest form of business organization.
The true statement about sole proprietorships is that they are the simplest form of business organization.
The true statement about sole proprietorships is:
A sole proprietorship is the simplest form of business organization.
To determine the correct answer, we need to assess each statement individually.
Statement 1: "A sole proprietorship can continue if the owner dies." - This statement is false. A sole proprietorship is directly tied to the owner, so if the owner dies, the business generally ceases to exist.
Statement 2: "A sole proprietorship is the simplest form of business organization." - This statement is true. A sole proprietorship is the simplest and most common form of business structure where a single individual owns and operates the business. It requires minimal legal requirements and paperwork.
Statement 3: "The owner of the sole proprietorship must report to shareholders." - This statement is false. In a sole proprietorship, there are no shareholders. The owner is the sole person responsible for making decisions and managing the business.
Statement 4: "The owner of the sole proprietorship has limited liability." - This statement is false. In a sole proprietorship, the owner has unlimited personal liability. This means that the owner's personal assets can be used to satisfy business debts or obligations.
Therefore, the correct answer is: A sole proprietorship is the simplest form of business organization.