When trying to determine the best business type to launch, a restaurant owner is confused about what differentiates a sole proprietorship from a partnership. Which of the following could be used to explain the difference? a)A partnership is considered a special entity, whereas a sole proprietorship is not. b)A sole proprietorship has a sole owner who takes on all the debt instead of sharing it. c)A partnership has two owners while a sole proprietorship has a holding company. d)A partnership is a very large business with smaller companies underneath.

Sole Proprietorship: What It MeansA sole proprietorship is one of the earliest types of business…

Answered: When trying to determine the best…

Principles Of Marketing

17th Edition

ISBN:9780134492513

Author:Kotler, Philip, Armstrong, Gary (gary M.)

Publisher:Kotler, Philip, Armstrong, Gary (gary M.)

Chapter1: Marketing: Creating Customer Value And Engagement

Section: Chapter Questions

Problem 1.1DQ

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When trying to determine the best business type to launch, a restaurant owner is confused about what differentiates a sole proprietorship from a partnership. Which of the following could be used to explain the difference?

	a)	A partnership is considered a special entity, whereas a sole proprietorship is not.
	b)	A sole proprietorship has a sole owner who takes on all the debt instead of sharing it.
	c)	A partnership has two owners while a sole proprietorship has a holding company.
	d)	A partnership is a very large business with smaller companies underneath.

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

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