Question

A sole proprietor’s business is experiencing rapid growth, but they are unable to meet financial demands. This reflects a limitation of the sole proprietorship structure.

विकल्प

• True

• False

Answer 1

True

Explanation:

In a sole proprietorship, the capital is limited to the owner’s personal savings and borrowing capacity. When the business grows rapidly, the sole proprietor may not be able to raise enough funds to meet increasing financial demands.