Which of the following is an advantage of a sole proprietorship?

• A. Profits are shared among multiple owners.
• B. The owner has complete control over business decisions.
• C. Limited liability protects the owner's personal assets.
• D. It is easy to raise large amounts of capital.

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the definition of a sole proprietorship. It is a business owned and operated by a single individual, meaning there is only one owner responsible for all decisions and liabilities.
2. Step 2: Analyze the options given. Since a sole proprietorship has only one owner, profits are not shared among multiple owners, so the first option is incorrect.
3. Step 3: Consider control over business decisions. Because there is only one owner, that person has complete control over all business decisions without needing approval from partners or shareholders.
4. Step 4: Evaluate liability. In a sole proprietorship, the owner has unlimited liability, meaning personal assets are not protected from business debts, so limited liability is not an advantage here.
5. Step 5: Assess capital raising ability. Sole proprietorships typically find it difficult to raise large amounts of capital compared to corporations or partnerships, so this is not an advantage.