Which of the following, if true, strengthens the case for Nina running

QUESTION

Which of the following, if true, strengthens the case for Nina running the business as a sole proprietorship?

A) Sam is experienced in dry-cleaning.
B) Sam has a wide base of existing customer contacts.
C) Sam is not willing to take on legal liability in the company.
D) Nina is relatively new to the dry-cleaning business.
E) Nina is not much of a “people person.”

ANSWER

Answer: C
Explanation: C) If Sam does not want to take on legal liability, then he should not be one of the owners of the company, which would leave Nina as the sole proprietor. On the other hand, if Sam is experienced in the dry-cleaning business (Choice A) or has existing customer contacts (Choice B), it might strengthen the case for his being co-owner of the business. If Nina is relatively new to the business (Choice D), then this weakens the case for her being sole proprietor, as would Nina’s not being a “people person” (Choice E), since owning and running a business requires constant interaction with a wide variety of people.