Question

A sole proprietorship: Multiple Choice provides limited financial liability for its owner. involves significant legal costs during the formation process. has an unlimited life. has its profits taxed as personal income.

Answer 1

Answer:

Has its profits taxed as personal income

Explanation:

Sole proprietorship: The sole proprietorship is the person who is the single owner of a company. He is personally liable for all the acts which are held in the company. In this, there is no separate entity between the company and its members.

Moreover, during filling the return, the owner has to file a tax based on the profits on its personal income

Its owner choice to continue the business for longer period or for a shorter period. So, it does not has unlimited life, neither it have limited financial liability nor it involves significant legal costs during the formation process.

So, a sole proprietorship has its profits taxed as personal income.