What Is Sole Proprietorship: Definition, Advantages & Disadvantages


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How many people typically work for a sole proprietorship?

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1. How does an owner incorporate a sole proprietorship?

2. How does an owner start a sole proprietorship?

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About This Quiz & Worksheet

The most common model for a small business, a sole proprietorship offers advantages and disadvantages to the sole proprietor. This lesson and quiz helps you understand the benefits of operating a sole proprietorship and the limitations and risks of this type of enterprise.

Quiz and Worksheet Goals

In these assessments you'll be tested on:

  • The tax structure for sole proprietorship
  • The process for launching a sole proprietorship
  • The workforce of a sole proprietorship
  • Incorporation requirements for this type of business
  • Rules regarding names of sole proprietorships

Skills Practiced

This quiz and worksheet allows you to test the following skills:

  • Information recall - access your knowledge on the advantages and disadvantages of sole proprietorships
  • Knowledge application - use your knowledge to explain the limited legal requirements for starting a sole proprietorship
  • Making connections - examine how sole proprietors benefit from the tax structure for this type of business

Additional Learning

To learn more, review the accompanying lesson, What is a Sole Proprietorship: Definition, Advantages & Disadvantages. This lesson covers the following objectives:

  • Describe the key advantages of a sole proprietorship
  • Explain the risks and liabilities of sole proprietorships
  • List the challenges involved in expanding this type of business
  • Understand how sole proprietorships offer freedom and flexibility
  • Recognize the pressure and demands sole proprietors face