Review Management Issues of Proprietorships

For most sole proprietorships, the income tax rates are _______ than corporations

• lower

• higher

• the same

A lot of formal documents are needed to begin and end a proprietorship.

• True

• False

When it comes to making decisions, sole proprietors

• Must consult others before making decisions

• Can make decisions without consulting others

All profits earned belong to the sole proprietorship

• True

• False

How is the relationship between the proprietor and employees in a sole proprietorship?

• Professional and formal

• distant and uninvolved

• like a family

• competitive and hostile

How can sole proprietors avoid failure?

• By refusing to solicit advice from others

• By limiting their creativity and inventiveness
  

• By managing their time inefficiently
  

• By seeking advice and guidance from others

What is a potential limitation to the expansion of a sole proprietorship?

• Lack of control over business operations
  

• Limited access to government support
  

• Inability to adapt to changing conditions
  

•  Owner's lack of capital

  
  

What happens to a sole proprietorship if the owner becomes unable to work?

• The business closes permanently
  

• A board of directors takes over management
  

• The employees become the new owners
  

• The employees elect a new proprietor

  
  

What personal possessions may a sole proprietor risk losing in case of business failure?

• business investments

• possessions such as a car or home

•  Intellectual property rights
  

Proprietors rarely work overtime.

• True

• False