World Of Work Practice Exam

Which statement describes a sole proprietorship?

A business that is completely owned by one person. A legal arrangement in which two or more people share ownership. A business chartered by a state that legally operates apart from the owner. A nonprofit organization.

Correct Answer:

A business that is completely owned by one person.

Explanation:

A sole proprietorship is a business owned and run by one person. This simple structure means there is no separate legal entity—the owner and the business are the same, so the owner has full control and bears all liability. The description that matches this is a business completely owned by one person. The other statements describe different forms: two or more people sharing ownership points to a partnership; a business chartered by the state that operates apart from the owner describes a corporation, a separate legal entity; and a nonprofit organization is organized for a charitable or public benefit purpose and typically not owned by a single person for profit.

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