Question

Following is not a characteristic of sole proprietorship business _______________.

• A. Easy to form and wind up
• B. Difficult to maintain secrets
• C. Direct motivation
• D. None of the above

Answer 1

The correct option is B Difficult to maintain secrets

Characteristics of Sole proprietorship business are-

1. : There is no separate law that governs sole proprietorship. Hardly any legal formalities are required to start a sole proprietary business, though in some cases one may require a license. Closure of the business can also be done easily. Thus, there is ease in formation as well as closure of business.
2. The risk of failure of business is borne all alone by the sole proprietor. However, if the business is successful, the proprietor enjoys all the benefits. He receives all the business profits which become a direct reward for his risk bearing.
3. The right to run the business and make all decisions lies absolutely with the sole proprietor. He can carry out his plans without any interference from others and there is no difficulty in maintain secrets.

Option D is the correct option.