Question

Which statements are true? Check all that apply: All profits from a sole proprietorship are passed...

Which statements are true?

Check all that apply:

All profits from a sole proprietorship are passed through to the owner for paying taxes.

A sole proprietorship offers limited liability.

A sole proprietorship is easy to set up.

It is impossible to sell a part of your ownership stake in a sole proprietorship.

A sole proprietorship is subject to few government regulations.

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Answer #1

Yes it is true, that in a sole proprietorship, the profits are passed through to the owner for paying taxes. This means that the sole proprietorship firm is not subject to income tax. Rather, the owners are directly taxed individually on the income, taking into account their share of the profits and losses.

This statement is False. A sole proprietorship offers unlimited liability. The owners of the sole proprietorship are personally liable to pay for the losses of the business even if it means selling their personal assets.

It is true that a sole proprietorship is easy to set up.

It is false that is impossible to sell a part of the stake to any buyer. A sole proprietor is free to sell all or a portion of his or her business to a buyer.

It is true that a sole proprietorship is subject to a few government regulations.

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