Question

question 2 of 19
why might a business owner choose a sole proprietorship despite its unlimited liability?
select an answer from the options below.
a to have access to public capital
b to minimize overhead expenses
c to reduce government regulation
d to limit their personal liability

Explanation:

• Option A: Sole proprietorships do not have access to public capital like corporations. Public capital is typically for publicly - traded entities.
• Option B: Sole proprietorships can have lower overhead expenses. There is no need to set up complex corporate structures, file extensive corporate paperwork, or have multiple layers of management.
• Option C: Sole proprietorships are subject to less government regulation compared to corporations. There are fewer legal formalities, such as less complex tax filing (compared to corporate tax returns) and fewer regulatory requirements for business operations.
• Option D: Sole proprietorships have unlimited liability, so this option is incorrect as it contradicts the nature of the business structure.

Answer:

B. To minimize overhead expenses, C. To reduce government regulation