Utah Contractor Practice Exam

How many managing members are there in a sole proprietorship?

1. 1

2. 2

3. 3

4. 4 or more

The correct answer is: 1

In a sole proprietorship, there is one managing member, which is the sole owner of the business. This structure is the simplest form of business organization, characterized by one individual who has complete control over all decisions and operations. The owner is personally responsible for all liabilities and obligations of the business, and profits are typically reported on their personal tax return. This structure allows for ease of management and minimal regulatory requirements, making it an attractive option for many small business owners. Other options suggesting multiple managing members do not apply, as a sole proprietorship by definition has a single owner, which distinguishes it from partnerships or corporations where multiple individuals can hold management roles.