Question

Steps to Creating a Super Startup Starting a business is a complicated and risky task. Just two-thirds of new small businesses survive at least two years, and only 44 percent survive at least four years. Most entrepreneurs start their businesses by dipping into their savings, borrowing from the family, and using the founder's credit cards. Getting a bank loan is tough unless you have assets and that often means using your home as collateral. Source: CNN, October 18, 2007 When starting a business, what are the risks and potential rewards identified in the news clip that are associated with a proprietorship? According to the news clip, the risks of starting a business as a proprietorship include and the potential rewards include O A. the owner's entire wealth is at risk and bad decisions are not checked; they are easy to set up OB. the firm dies with the owner, profits are taxed only once as owner's income O c. bad decisions are not checked, profits are taxed twice 1 OD. the owner has limited liability, they are easy to set up

Answer 1

Correct option: (A) the owner's entire wealth is at risk and bad decissions are not checked; they are easy to set up

Reason: The risk with proprietorship business is that the entire wealth of owner is put up at risk and is borne entirely by him

However, the rewards are easy to make and set up and enjoyed entirely by the owner