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Sole Proprietorship

KEY TAKEAWAYS

  • A sole proprietorship is a business owned by only one person.
  • It’s the most common form of ownership and accounts for about 72 percent of all U.S. businesses.

  • Advantages of a sole proprietorship include the following:

    1. Easy and inexpensive to form; few government regulations
    2. Complete control over your business
    3. Get all the profits earned by the business
    4. Don’t have to pay any special income taxes

  • Disadvantages of a sole proprietorship include the following:

    1. Have to supply all the different talents needed to make the business a success
    2. If you die, the business dissolves
    3. Have to rely on your own resources for financing
    4. If the company incurs a debt or suffers a catastrophe, you are personally liable (you have unlimited liability)