Topic 4 T2 (sole proprietor )

Question 1

What is a sole proprietor

Answer 1

• Not registered
• Natural person
• Small
• Could have employees

Question 2

What are the characteristics of sole proprietor

Answer 2

• one owner
• no distinction between the owner and business
• not legal entities
• everything belongs to owner
• owner responsible for debt

Question 3

What are the advantages of sole proprietor

Answer 3

• Can just start doing business does not have to register
• no one else permission
• direct contact with consumers
• success of business belongs to the owner

Question 4

What are the disadvantages of sole proprietor

Answer 4

• only the owners time, skills and energy
• business can not carry on if the owner dies or retires
• personal tax rates are much higher than tax rates for companies
• unlimited liabilities for the debt
• Capital is limited