Sole Proprietorship

Question 1

What is Sole proprietorship

Answer 1

This is a business owned and controlled by just one person.

Question 2

What are the advantages of Sole Proprietorship

Answer 2

• It is easy to start
• The owner keeps all the profit
• The owner enjoys complete secrecy in the business
• The owner enjoys contact with the customers
• It involves small capital.

Question 3

What are the disadvantages

Answer 3

• The owner doesn’t have anyone to discuss business matters
• The business might collapse if the owner dies.
• The owner has unlimited liability(He/She is held responsible for any loss)
• The Sole proprietor usually finds it difficult to raise capital
• It does not encourage division of income.