Question

Maurice and Stanley's train store has grown to the point that they need more capital to expand the current location and to open stores in other cities. They do not want the liability of taking out a loan and are no longer concerned about government oversight but would still like to maintain limited liability. They would most likely form a
a. corporation.
b. sole proprietorship.
c. syndicate.
d. co-op.

Answer 1

Answer:

b. sole proprietorship.

Explanation:

• A sole proprietorship is a single business entity that is responsible for all profits and losses and may use a sole name or a business name as a private company is known for its flexibility and thus does not need to take large loans from the government.

• Have an advantage of less administrative paperwork and record-keeping than a corporation, have less risk of being stolen by investors.