3
QuizMultiple Choice

Business Structures

Question 3 • RAIL NCAA OC Economics 2027

Which can be considered disadvantages of sole proprietorships and partnerships?

Answer
P
Partnerships require many people to write a charter, while sole proprietorships require one person to write a charter.
S
Sole proprietorships require one person to know complicated tax laws, while partnerships require many people to know the rules.
P
Partnerships require one person to do many things, while sole proprietorships require many people to weigh in on decisions.
S
Sole proprietorships require one person to do many things, while partnerships require many people to weigh in on decisions.

Explanation

A sole proprietor runs the business alone, so one person may have to handle many responsibilities. In a partnership, decisions may require input or agreement from multiple partners, which can slow decision-making. These are disadvantages described by choice D.

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