Janice owns a small business which operates as a sole proprietorship. Unfortunat

Question

Janice owns a small business which operates as a sole proprietorship. Unfortunately, she has very poor health and may not be able to continue running the business. Should she become incapacitated, her business: Select one: automatically converts into a public corporation with stock sold to interested investors ceases to exist unless sold or taken over by Janice's heirs. b. c. becomes the property of the most senior employee who wishes to continue operating the firm d. automatically continues under new management as a sole proprietorship

Explanation / Answer

Solution:

Its answer is B.

Because without proper planning, if the owner of sole properietorship is incapacity or premature death may result that the business should be sold, liquidated to outside parties. Or it can be taken over by family members.

So its answer is B. ie. Ceases to exisr unless sold or taken over by janice's heirs.

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