Future Business Leaders of America (FBLA) Agribusiness Practice Test

In a Sole Proprietorship, how can the business be operated?

1. Only under the owner's name

2. As a corporation

3. Under a trade name (dba)

4. Only as a partnership

The correct answer is: Under a trade name (dba)

In a Sole Proprietorship, the business can indeed be operated under a trade name, often referred to as "doing business as" (dba). This allows an individual to present their business to the public under a name that may differ from their own legal name. Using a trade name can be advantageous for marketing purposes, as it can help create a brand identity that resonates more with customers than simply using the owner's personal name. Operating a business under a trade name still maintains the legal structure of a sole proprietorship, meaning that the owner has complete control over the business and is responsible for its debts and obligations. This flexibility in naming is beneficial for sole proprietors who want to establish a distinct presence in the market while enjoying the simplicity of this business structure. It’s important to note that while they can operate under a trade name, sole proprietors are still not allowed to operate as a corporation or partnership, which are separate legal entities.