Question

joan borrowed $10,000 from a relative to start her own business. assuming she takes all responsibility for the company’s financial risks, the company is most likely a

○ sole proprietorship.

○ corporation.

○ partnership.

○ limited partnership.

Explanation:

A sole proprietorship is a business owned and run by one individual, who assumes all financial risks and liabilities. A corporation has limited liability (owners aren't personally responsible for business debts). A partnership involves multiple owners sharing risks, and a limited partnership has both general (with full liability) and limited (with limited liability) partners. Since Joan is the only one taking all financial risks, it's a sole proprietorship.

Answer:

A. sole proprietorship.