Question

State whether the following are True or False:

A sole proprietorship firm has no legal existence separate from its owner.

Answer 1

This statement is true.

Explanation:

A sole proprietorship is a form of business where the owner and the business are not legally separate. Since the business is not a distinct legal entity, the owner is personally responsible for all its debts and obligations, and the business’s assets and liabilities are treated as the owner’s personal assets and liabilities.