Which of the following is a disadvantage of a sole proprietorship?
A) Paid vacation time is limited to two weeks per year.
B) There are no support groups specifically designed for sole proprietors to seek council on key decisions.
C) They usually have fewer financial resources and fewer ways to get funds from lenders or investors.
D) Social media sites can be hard to manage.
E) There is a smaller limit on personal liability.
Answer: C
Explanation: Because they depend on a single owner, sole proprietorships usually have fewer financial resources and fewer ways to get additional funds from lenders or investors. This lack of capital can hamper a small business in many ways, limiting its ability to expand, to hire the best employees, and to survive rough economic periods.
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