Various Business Entities — Flashcards

Answer

A sole proprietorship is a form of business ownership that is owned and controlled by one person. The proprietor provides the capital, manages the business, bears all the risks, and receives all the p…

Answer

It is called a one-person business because ownership, management, control, profits, and risks all rest with one individual. No separate person shares authority in the business.

Answer

Unlimited liability means the sole proprietor is personally liable for all business debts. If business assets are not enough, personal property may also be used to pay the debts.

Answer

A sole proprietorship and its owner are treated as one in law. The business has no legal identity separate from the owner, so business and owner exist together.

Answer

There is minimum government regulation. No legal formalities are required to start, manage, or close the business, though a licence may be needed in certain businesses.

Answer

The main limitations are limited funds, limited managerial ability, unlimited liability, and lack of continuity. The business depends completely on one person.

Answer

L.H. Haney. The statement shows that one individual controls the business and bears the risk alone.

Answer

Partnership is the relation between persons who have agreed to share profits of a business carried on by all or any one of them acting for all. It is based on agreement and profit sharing.