Future Business Leaders of America (FBLA) Agribusiness Practice Test

What is one advantage of a sole proprietorship?

1. Easy to transfer ownership

2. All profits are subject to corporate tax

3. Decisions can be made quickly

4. Owners have limited control

The correct answer is: Decisions can be made quickly

One significant advantage of a sole proprietorship is that decisions can be made quickly. This business structure typically involves a single owner who has complete control over operations, enabling rapid decision-making without the need to consult with partners or a board of directors. This agility allows the owner to respond swiftly to changes in the market or to implement new ideas without bureaucratic delays, which can be particularly beneficial in dynamic industries or during times of crisis. In contrast, transferring ownership in a sole proprietorship can be challenging, as it often involves selling the entire business rather than just shares. Additionally, profits in a sole proprietorship are taxed as personal income, rather than being subject to corporate tax, which is typically a characteristic of corporations. Lastly, owners of sole proprietorships have unlimited control, challenging the idea that they have limited control. Thus, the ability to make quick decisions is a standout benefit of this business structure.