Which of the following is a source of capital to a sole proprietorship?
-
Loans from friends
- Admission of new member
- Issue of shares
- Issue of debentures
The correct answer is: A
Explanation
One of the sources of funds for sole traders is the loans they get from family and friends. While it takes little or no legal documentation to establish a sole proprietorship, getting funds to finance the business has always posed a constraint to its growth. Hence the business owner is left with sourcing funds from either friends and families, grants, or plough-back profits.