GuideFoot - Learn Together, Grow Smarter. Logo

In Business / College | 2025-07-08

Lily wants to build a business. She has very little capital. She does, however, have a partner with which she could run a business. Lily wants to be able to avoid being held personally liable for any problems the business has. Which of the following would lead Lily to choose a sole proprietorship organization for her business?

A. Possession of a partner
B. Avoidance of personal liability
C. Little capital
D. None of the above

Asked by Lamb1980

Answer (2)

Lily would not choose a sole proprietorship due to her desire to avoid personal liability, which that structure does not provide. Additionally, having a partner goes against the concept of a sole proprietorship. Therefore, the correct answer is D. None of the above.
;

Answered by Anonymous | 2025-07-08

ANSWER:
C) Little capital
EXPLANATION:
Lily should create her firm as a sole proprietorship for these reasons: "LITTLE CAPITAL." Since a single proprietorship does not need registration, Lily may start her business with minimal money and paperwork.
If Lily owned the firm alone, she would have full control over all decisions and operations. Lily would also not have to share the company's profits as a sole owner. She may then fully reinvest her gains in the enterprise.

Answered by ShyShy7899 | 2025-07-13

Related Questions in Business

📝 Answered - When the yield to maturity of a bond goes up, the price typically: A. is determined by market factors B. goes down C. does not change D. goes up

📝 Answered - A type of life insurance policy that requires premiums only for a specified number of years or to a specific age is called a: A. term life policy B. limited pay policy C. key man insurance policy D. split dollar policy

📝 Answered - Which of the following correctly explains how the concept of demand affects the change in use of credit? Select the two correct answers. A. High interest rates yield low demand for credit. B. Low interest rates yield high demand for credit. C. High interest rates yield high demand for credit. D. Low interest rates yield low demand for credit. E. Both low and high interest rates yield low demand for credit because consumers see it as an indicator that the market is not in equilibrium. Demand is highest when rates are neither too high nor too low.

📝 Answered - A company is researching mining at four different land areas using different types of equipment. The table below shows the costs of land, equipment, mining, and reclamation for the four locations: | Locations | Cost of land | Cost of equipment | Cost of mining and reclamation | Time taken to mine the area | | --------- | ------------ | ----------------- | -------------------------------- | --------------------------- | | 1 | $100,000 | $10,000 | $5,000 per day | 30 days | | 2 | $35,000 | $6,000 | $4,500 per day | 45 days | | 3 | $30,000 | $7,500 | $3,500 per day | 120 days | | 4 | $40,500 | $8,000 | $7,000 per day | 65 days | Considering all costs, which location will cost the least for the company to mine? A. Location 1 B. Location 2 C. Location 3 D. Location 4

📝 Answered - Internal-operational communications are messages that A. are circulated both inside and outside a business B. get an organization's work done C. are sent between competing organizations within the same industry D. employees send to discuss strictly personal matters