Good reason for dave to own business as sole proprietorship

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Reference no: EM132181753

Dave wants to start a lawn maintenance service. He wants to operate on his own with no partners and no employees. He will use his own truck to drive from job to job. His equipment will consist of mowers, lawn blowers, trimmers, etc. Dave lives in an apartment on his own. His personal wealth is $5,000.

1. Which of the following would not be a good reason for Dave to own his business as a sole proprietorship?

A. It would be the easiest form of business to start.

B. He wants to be the only owner

C. He will be able to limit his personal liability

D. He will have less paperwork and regulations to deal with

2. What is the biggest liability concern that Dave should have with his new business?

A. His business might not do well and he could lose money

B. He will be driving his vehicle from job to job

C. He will have to work long hours and work on weekends

D. Customers might not be satisfied with his work

3. What would be the best reason for Dave to incorporate rather than be a sole proprietorship?

A. Dave can limit his personal liability

B. Dave will find it easier to operate as a corporation

C. There really is no difference between the two

D. Dave will find it easier to attract employees to the business

4. If Dave does incorporate, what type of corporate tax status would be best for him?

A. C corporation

B. Non-profit corporation

C. S corporation

D. Professional services corporation

Reference no: EM132181753

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