Commercial Applications
In a sole proprietorship, the business and the owner are considered …………… .
- Two separate legal entities
- A single legal entity
- Governed by different laws
- Managed under a partnership deed
Sole Proprietorship
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Answer
A single legal entity
Reason — A sole proprietorship has no legal identity separate from that of its owner. The law makes no distinction between the proprietor and their business. The business and the owner exist together as one — the proprietor and their business are one and the same.
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Related Questions
Statement I: The capital of joint Hindu family business is limited to the ancestral property.
Statement II: The Karta of joint Hindu family business may not be competent to manage the business.
- Both I and II are correct
- Both I and II are wrong
- Only I is correct
- Only II is correct
Assertion (A): Sole proprietors have unlimited personal liability for the business debts.
Reason (R): Personal assets of the owner may be used to settle business obligations in case of financial difficulties.
- A is true but R is false.
- A is false but R is true.
- Both A and R are true and R explains A.
- Both A and R are true but R does not explain A.
In a joint Hindu family business, all members have equal liability, including the karta.
- True
- False
In a sole proprietorship, decisions can be made ……………, whereas in a joint Hindu family business, decisions are made by …………… .
- By consensus; family members jointly
- Independently; the karta
- By majority vote; external consultants
- By board meetings; coparceners