Which of the following is a key advantage of incorporating a business as a sole proprietorship?
A) Owners receive tax exemptions when a business is a sole proprietorship.
B) It helps proprietors file taxes separately from their personal income.
C) It is easy to establish and requires less paperwork than other structures.
D) Owner's risk is limited to the extent he/she has invested in the business.
E) Risk associated with sole proprietorship is less, compared to other structures.
Answer: C
Explanation: A sole proprietorship is easy to establish and requires far less paperwork than other structures. The only legal requirement for establishing a sole proprietorship is obtaining the necessary business licenses and permits required by the city, county, and state.
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