Sole Proprietorship

There are various types of businesses a person or a group of persons can start. One of them is the Sole Proprietorship. This is nothing but a business run by a single person. So, this will be a small-scale business. Along with that, the profit will not be needed to be shared among the others. As for a great value comes great responsibility; the owner needs to take on a lot of responsibilities. Not only responsibilities but there will be unlimited liabilities. This type of business doesn’t include a group of people and only for a single person; that is why this type of business is out of many rules and regulations. The most important aspect of this type of business is that this type of business has a very unstable life. If the owner dies or faces any issue, the business will be ended at that very moment.

Here are some MCQs based on the factors and features of Sole Proprietorship. These will help you understand the topic in a better way so that you have a lot of knowledge on the topic and get expertise on Sole Proprietorship.

1. Which of the following is a Sole Proprietorship?

1. 1. A business owned by different companies
   2. A business owned by a president
   3. A business owned by a company
   4. A business owned by a person?

Ans. D) A business owned by a person

2. What kind of life does a firm of a Sole Proprietorship get?

1. 1. Short term
   2. Long term
   3. Unstable life (comparatively)
   4. Stable life

Ans. C) Unstable life (comparatively)

3. What is the main factor in the life of a firm of a Sole Proprietorship?

1. 1. The wish of the owner
   2. The lifespan of the owner
   3. No interference from others
   4. All of the above

Ans. D) All of the above

4. How many people are required to start a Sole Proprietorship business?

1. 1. At least 10 persons
   2. Only one person
   3. At least 2 persons
   4. At least 7 persons

Ans. B) Only one person

5. Which can be owned by only a single person of the following?

1. 1. A Sole Proprietorship
   2. A private company
   3. A public company
   4. A joint-stock company

Ans. A) A Sole Proprietorship

6. How can a Sole Proprietorship be useful for a general store?

1. 1. Completely useful
   2. Somehow useful
   3. Not at all useful
   4. A Sole Proprietorship can not run a general store.

Ans. A) Completely useful

7. Is there any need for a Sole Proprietorship to publish the account?

1. 1. Yes, necessary.
   2. Depends on the business
   3. Depends on the owner
   4. Not at all.

Ans. D) Not at all

8. In which sector of the following does a Sole Proprietor have a limit?

1. 1. The Owner
   2. The Managerial
   3. The Worker
   4. None of the above

Ans. B) The managerial

9. Which type of business or concern is the most suitable for a Sole Proprietorship?

1. 1. A Large-scale business
   2. A medium-scale business
   3. A small-scale business
   4. None of the above.

Ans. C) A small-scale business

10. Which of the following is the drawback of being a Sole Proprietorship owner?

1. 1. A faster decision making
   2. Unlimited liabilities
   3. An easy formation
   4. The personal control

Ans. B) Unlimited Liabilities

11. The managerial abilities of a business is a drawback of which business type?

1. 1. The Public Business
   2. The Private limited business
   3. The Sole Proprietorship business
   4. The Joint-stock business

Ans C) The Sole Proprietorship business

12. Which type of business doesn’t require any sharing of the profit?

1. 1. Company business
   2. Joint family business
   3. Partnership business
   4. Sole Proprietorship business

Ans. D) Sole Proprietorship business

13. How much liability should a Sole Proprietorship owner need to take?

1. 1. A very little liability
   2. No liabilities at all
   3. Unlimited liabilities
   4. Restricted liability.

Ans. C) Unlimited liabilities

14. In what ratio does the profit of the Sole Proprietorship business gets shared?

1. 1. Equally, among the partners
   2. Equally, among the employees
   3. No need to share at all.
   4. There will be no profit.

Ans. C) No need to share at all

15. For a small-scale business which type of business idea will be perfect?

1. 1. The Sole Proprietorship business
   2. The joint-stock business
   3. The limited private business
   4. The Company business

Ans. A) The Sole Proprietorship business

16. Who owns a Sole Proprietorship firm?

1. 1. A group of persons
   2. A single person
   3. A committee
   4. The government

Ans. A single person

17. From which of the following, the Sole Proprietorship related concerns are out of all the regulations?

1. 1. The Indian law
   2. A private Indian
   3. The government
   4. Indian contract act

Ans. C) The government

18. Why can a Sole Proprietorship come to an end?

1. 1. Death of the owner
   2. The insanity of the owner 
   3. Insolvency of the owner 
   4. All of the above options

Ans. D) All of the above answers

19. Which of the following is just the opposite of the features of a Sole Proprietorship?

1. 1. The Secrecy
   2. The limited liability
   3. The undivided risk
   4. The individual ownership

Ans. B) The limited liability

20. Identify the limitations of a Sole Proprietorship.

1. 1. The Limited source of capital
   2. Unlimited liabilities
   3. Unbalanced management
   4. All of those

Ans. D) All of those

21. Which of the following implies the advantage of a Sole Proprietorship?

1. 1. The personal control
   2. The Quick decision
   3. The easy formation
   4. All of the above

Ans. D) all of the above

22. Which can be referred to as the simplest form of business?

1. 1. The partnership
   2. The Sole Proprietorship
   3. The franchise
   4. None of the above

Ans. B) The Sole Proprietorship

23. Plumber is an example of which type of business?

1. 1. The Sole Proprietorship
   2. The franchise
   3. The corporation
   4. The partnership

Ans. A) The Sole Proprietorship

24. What is considered to be a con of a Sole Proprietorship?

1. 1. Capital can be raised easily
   2. Approval for the decisions
   3. Completely responsible for any issue that occurred.
   4. Business can be continued even after the death of the owner.

Ans. C) Completely responsible for any issue that occurred.

25. What can be a pro of a Sole Proprietorship?

1. 1. It is hard to get out of the business
   2. Split profit equally
   3. A hobo can tell you about the steps
   4. No need for approval on any decisions.

Ans. D) No need for approval on any decisions

26. If an agreement gets signed between two people or more than that for a particular business, which type of business will that be?

1. 1. A franchise business
   2. A Sole Proprietorship business
   3. A partnership business 
   4. A corporate business

Ans. C) A partnership business

27. Which type of business is considered to be the most complex form of business?

1. 1. A franchise business
   2. A Sole Proprietorship business
   3. A partnership business 
   4. A corporate business

Ans. D) A corporate business

28. Which type of loan will be the most suitable for the Sole Proprietorship?

1. 1. The granting
   2. The leasing
   3. The micro-lending
   4. The microlending

Ans. C) The micro-lending

29. What will a Sole Proprietorship business turn into after the death of the owner?

1. 1. It will completely close.
   2. It will turn into a proprietor’s bequest.
   3. It will turn into a partnership business
   4. It will be a company business

Ans. B) It will turn into a proprietor’s bequest

30. How many risks are invaded there in the Sole Proprietorship business on the owner?

1. 1. The owner has no risk at all
   2. The risks get distributed equally
   3. The risk is negligible
   4. The owner is fully responsible for any issues.

Ans. D) The owner is fully responsible for any issues

31. How many people will be there with the owner in a Sole Proprietorship business?

1. 1. At least one more
   2. No one at all
   3. A group of people
   4. A complete governing body.

Ans. B) No one at all

32. How much obligation should a Sole Proprietorship business owner face?

1. 1. Limitless obligations
   2. A very little obligation
   3. No obligations at all
   4. A moderate number of obligations.

Ans. A) Limitless obligations

33. What will be the basic size of the task for a Sole Proprietorship business?

1. 1. Small-sized tasks
   2. Medium size tasks
   3. Large-sized tasks
   4. No tasks at all

Ans. A) Small-sized tasks

34. What is the other name of the Sole Proprietorship business?

1. 1. A franchise business
   2. A Sole tradership business
   3. A partnership business 
   4. A corporate business

Ans. B) A Sole tradership business

35. Which of the following can be a good example of A Sole Proprietorship business?

1. 1. A general store
   2. A beauty parlour
   3. A plumber
   4. All of the above

Ans. D) All of the above

36. How much expertise would someone need to start a Sole Proprietorship business?

1. 1. At least 10 people
   2. None at all
   3. At least 1 people
   4. A group of people

Ans. B) None at all

37. How much capital would someone need to start a Sole Proprietorship firm?

1. 1. It will be a huge amount of capital will be needed
   2. A large amount of capital will be needed
   3. A moderate amount of capital will be needed
   4. A small amount of capital will be needed.

Ans. D) Small amount of capital will be needed

38. What is the main feature of the Sole Proprietorship business in terms of account?

1. 1. Does the owner need to publish the account?
   2. The publishing is completely mandatory
   3. The publishing of the account is not even needed at all
   4. The publishing is optional

Ans. C) The publishing of the account is not even needed at all