Paper 2 · sole proprietorship
A disadvantage of operating a business as a sole proprietorship is that
Athe owner is required to appoint a board of directors to run the business for them.
Bthe owner has unlimited liability, so personal assets can be seized for its debts.
Cthe owner must share the profits equally with the other owners of the business.
Dthe business is required to publish its accounts for the general public to read.
Explanation: A sole proprietorship has no legal identity separate from its owner, so the owner's house, vehicle and savings can be taken to settle business debts. There are no other owners to share profit with, no legal duty to publish accounts and no board of directors, since all three of those belong to a company.
Derived from ZIMSEC Business Enterprise Skills Paper 2, Nov 2023, Q1