What are the advantages and disadvantages of Sole Proprietor?
Advantages of a Sole Proprietor
•Quick, inexpensive and easy to set up and liquidate
•Not subject to company regulation
•Owner has total autonomy over business decisions
•Owner claims all the profits of the business and all the after-tax gains if the business is sold
Disadvantages of a Sole Proprietor
•Unlimited liability – bears full responsibility for business debts and legal actions such as negligence
•Limited by skill, time and investment of owner
•Restrictive structure due to non-legal status of the entity
•Business will cease to exist if owner leaves, retires or dies