MCQs on Sole Proprietorship

Sole proprietorship is the simplest and the oldest form of business under which an individual is able to conduct business. It does not need to be registered or incorporated. Therefore, it is not considered as a legal entity.

Sole proprietorship can be operated under the name of the owner or some fictitious name. It is one of the most common forms of business structure that is found in India. It is regarded as an ideal choice for conducting small or medium-sized business.

Following are some of the sole proprietorship multiple choice questions and answers that will help the students in brushing up their understanding of the concept of the business form of sole proprietorship.

1.What is a Sole Proprietorship?

A.Business owned by president

B.Business owned by several companies

C.Business owned by one person

D. Business owned by a company

Answer: C

2. Which of the following is owned by a single person

A.Private Company

B.Public Company

C.Joint Hindu Family

D.Sole Proprietorship

Answer: D

3. Sole proprietorship business can be started by

A. at least seven persons

B. any one person

C. at least two persons

D. at least three persons

Answer: B

4. A sole proprietor has a limit in which of the following ability




D.None of these

Answer: A

5. Sole Proprietorship is most suitable for

A. Medium scale concerns

B. Large scale concerns

C.Small scale concerns

D.None of the above

Answer: C

6. The life of sole proprietorship business is

A. Stable

B. Very short life

C. Unstable

D. Long life

Answer: C

7. In which form of business, there is no need to share profits.

A. Company

B. Sole proprietorship

C. Partnership

D.Joint Hindu family business

Answer: B

8. A Sole proprietor concern is free from regulation by.

A. Indian Contract Act


C. Private Indian

D.Indian Law

Answer: B

9. The reason for the end of the sole proprietorship can be



C. Death

D.All the above

Answer: D

10. Sole proprietorship business owner has

A. Restricted Liability

B.No Liability

C.Unlimited Liability

D.Limited Liability

Answer: C

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