Question

select the correct answer.
ronald is the sole owner of a fast food store. over the past six months, his sales have fallen and the store has been running at a loss as a result of a popular fast food chain outlet opening in the area. friends and relatives who lent ronald money to open the store want him to sell his personal property in order to repay those loans. what ownership category of business is ronald in?
a. limited partnership
b. corporation
c. proprietorship
d. cooperative organization

Explanation:

To determine Ronald's business ownership category, we analyze each option:

• Option A (limited partnership): Involves multiple partners with limited liability for some, but Ronald is the sole owner, so this is incorrect.
• Option B (corporation): A legal entity separate from owners, with limited liability. Ronald's personal property is at risk, so not a corporation.
• Option C (proprietorship): A business owned and run by one individual, where the owner has unlimited liability (personal assets at risk for business debts). Ronald is the sole owner and may have to use personal property to repay loans, matching proprietorship.
• Option D (cooperative organization): Owned and operated by its members for mutual benefit, not a sole - owner setup like Ronald's.

Answer:

C. proprietorship