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D432 HR Compliance &employee relations
Questions and Correct Answers
Sole Proprietorships Ans: form of business organization—a
business that is established, owned, operated, and often financed
by one person—because it was the easiest to set up. He did not
want partners, and low liability exposure made incorporating
unnecessary.
Advantages of Sole Proprietorship Ans: Easy and inexpensive to
form
Profits all go to the owner
Direct control of the business
Freedom from government regulation.
No special taxation.
© 2025 All rights reserved
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Ease of dissolution.
Disadvantages of Sole Proprietorship Ans: Unlimited liability
Difficulty raising capital.
Limited managerial expertise.
Trouble finding qualified employees
Personal time commitment
Unstable business life.
Losses are the owner's responsibility.
ADR (Alternative Dispute Resolution) Ans: Alternative dispute
resolution (ADR) is a set of procedures designed to settle disputes
without the need for a formal trial. Typically, ADR includes
methods such as mediation and arbitration, as well as a few other
methods. ADR processes are generally confidential, less formal,
© 2025 All rights reserved
D432 HR Compliance &employee relations
Questions and Correct Answers
Sole Proprietorships Ans: form of business organization—a
business that is established, owned, operated, and often financed
by one person—because it was the easiest to set up. He did not
want partners, and low liability exposure made incorporating
unnecessary.
Advantages of Sole Proprietorship Ans: Easy and inexpensive to
form
Profits all go to the owner
Direct control of the business
Freedom from government regulation.
No special taxation.
© 2025 All rights reserved
, 2 | Page
Ease of dissolution.
Disadvantages of Sole Proprietorship Ans: Unlimited liability
Difficulty raising capital.
Limited managerial expertise.
Trouble finding qualified employees
Personal time commitment
Unstable business life.
Losses are the owner's responsibility.
ADR (Alternative Dispute Resolution) Ans: Alternative dispute
resolution (ADR) is a set of procedures designed to settle disputes
without the need for a formal trial. Typically, ADR includes
methods such as mediation and arbitration, as well as a few other
methods. ADR processes are generally confidential, less formal,
© 2025 All rights reserved
