Which of the following is a disadvantage of the sole proprietorship form of ownership? a. limited liability b. split responsibility c. control over the business d. unlimited liability

D. Unlimited liability

Explanation:

A sole proprietorship is a business owned by a single person who, unlike associations and other more complex business structures (corporations and LLC), does not have to register with the state to exist. If you are the sole owner of a business, you automatically have a sole proprietorship simply because you do business.

A sole proprietorship also has disadvantages. The biggest problem of sole proprietorships is that the owner's personal finances are linked to those of the business. This means that if the business suffers bankruptcy, the same happens to the owner so you have unlimited liability. Therefore, forming a sole proprietorship is more risky. The same happens if the business is sued: the lawsuit also falls against you (which means that you are responsible for all costs associated with the litigation). Sole proprietorships, on the other hand, must pay both income taxes and self-employed employee taxes (Social Security and Medicare). This means that, as the company generates more profits, it must also pay more taxes.

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation: