Description Of A Sole Proprietorship - 2552 Words

Sole Proprietorship Description A Sole Proprietorship is a business solely possessed by one person. The individual owner makes all the decisions and is held accountable for any matters pertaining to the business. An example of this is a lawsuit, due to the fact that legally the identity of the owner and the business is one and same. As a result of this lack of separation often times the owner is not required to register as a business unless a fake name is in use or certain services requiring a license are being offered. Two Advantages The first advantage of a Sole Proprietorship is that the owner makes all the decisions, without the need to consult anyone else. The second advantage is that the profits belong to the owner and he decides what to do with the money or how to invest it. (Russ, n.d) ( Two Disadvantages One disadvantage of a Sole Proprietorship is that the owner is solely liable and has no protection since his identity and personal finances are not separate in this model of business. The second disadvantage in a Sole Proprietorship is that if the owner were to die or if he wanted to retire and wanted to pass the business on to his children, he couldn t in a sole proprietorship so the business would end. Liability In a Sole Proprietorship, there are no limits on liability since the sole proprietor and the business are one and the same, thus if there was a legal dispute the business would not be sued, but the owner would. When it comes to money the soleShow MoreRelatedTutorial of Enterpreneur1126 Words   |  5 Pagesbetween the founders by following the amount of initial investment between the founders. 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