sole proprietorship( andvantages and disadvantages)

Question 1

Ease of start-up and closure

Answer 1

*Sole proprietorship is the simplest way to start a business.
*The legal requirements often are limited to registering the
name of the business and obtaining any necessary licences or permits.
If the enterprise does not succeed, the business can be closed as easily as it
was opened.

Question 2

Pride of ownership

Answer 2

A successful sole proprietor is often very proud of her or his accomplishments –
and rightfully so as they solve day to day problems.

Question 3

No special taxes

Answer 3

Profits earned by a sole proprietorship are taxed as the personal income of the
owner.

Question 4

Flexibility of being your own boss

Answer 4

A sole proprietor is completely free to make decisions about the business’s
operations. Without asking or waiting for anyone’s approval

Question 5

Unlimited liability

Answer 5

Unlimited liability is a legal concept that holds a business owner personally
responsible for all the debts of the business.

Question 6

Lack of continuity

Answer 6

Legally, the sole proprietor is the business. If the owner retires, dies, or is
declared legally incompetent, the business essentially ceases to exist.

Question 7

Lack of money

Answer 7

Banks, suppliers and other lenders usually are often unwilling to lend large sums
of money to sole proprietorships.

Question 8

Limited management skills

Answer 8

business owner is unlikely to have expertise in all these areas

Question 9

Difficulty in hiring employees

Answer 9

The sole proprietor may find it hard to attract and keep competent help. Potential
employees may feel that there is no room for advancement in a business whose
owner assumes all managerial responsibilities.