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Question
Which one of the following is NOT a feature of sole proprietorship business?
Which one of the following is NOT a feature of sole proprietorship business?
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Solution
The correct option is C Separate Legal Entity
Separate entity concept defines that the owner/proprietor and business are treated two separate legal entity in the eyes of law. Hence any contribution made by owner as part of capital is treated as liability in the business.
In case of proprietorship, owner and business both are same as the proprietor is only the sole owner of the business. Hence separate legal entity concept does not applies in the proprietorship business.
Separate entity concept defines that the owner/proprietor and business are treated two separate legal entity in the eyes of law. Hence any contribution made by owner as part of capital is treated as liability in the business.
In case of proprietorship, owner and business both are same as the proprietor is only the sole owner of the business. Hence separate legal entity concept does not applies in the proprietorship business.
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