Which of the following business ownership structures is the simplest and easiest to set up?

• A. Corporation
• B. Limited liability company (LLC)
• C. Sole proprietorship
• D. Partnership

Answer: (C)

Verified step by step guidance

1. Understand the concept of business ownership structures: Business ownership structures determine how a business is legally organized, taxed, and managed. Common types include sole proprietorship, partnership, corporation, and limited liability company (LLC).
2. Define sole proprietorship: A sole proprietorship is a business owned and operated by one individual. It is the simplest and easiest structure to set up because it does not require formal registration or complex legal agreements.
3. Compare sole proprietorship to other structures: Unlike corporations or LLCs, sole proprietorships do not require articles of incorporation, operating agreements, or board meetings. Partnerships require agreements between multiple owners, while corporations and LLCs involve more legal and tax complexities.
4. Highlight the advantages of sole proprietorship: Sole proprietorships are straightforward to establish, have minimal regulatory requirements, and allow the owner to have complete control over the business. However, they also come with unlimited personal liability for business debts.
5. Conclude why sole proprietorship is the correct answer: Given its simplicity, lack of formal setup requirements, and ease of operation, sole proprietorship is the most straightforward business ownership structure to establish compared to corporations, LLCs, or partnerships.