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JAMB Economics 1992 Question 22

Question 22

Business Organisations

The main handicap of sole proprietorship is

  1. A.limited liability
  2. B.lack of technical know-how
  3. C.low profit margin
  4. D.inadequate capital
Show the answer and explanation

Answer: D (inadequate capital)

Explanation

A sole trader depends on his own savings and small loans, so shortage of capital limits the business.