Question

Ethan started a website. After a few months, a publishing company filed a lawsuit against his company for copyright infringement. Ethan had to close the cuisness and sell all of the business's assests and his car in order to settle the lawsuit.

This is an example of which of the following:

a. A partnership
b. A proprietorship
c. An LLP/LLC
d. A corporation

Answer 1

Answer:

The correct answer is letter "B": A proprietorship.

Explanation:

Sole proprietorships are businesses with a single owner who is responsible for all the operations. The advantage of this type of business is that they are not strictly regulated by the government and are easy to form but the owner has full liability which implies if the business falls into debt, the personal assets of the owner can be considered to repay that debt.