Question

You would like to start a cellular telephone equipment service business. You are considering organizing the business as a sole proprietorship. Identify the advantages and disadvantages of owning a sole proprietorship.

Short answer

The advantage of sole proprietorship includes a single owner and it does not require sharing of profits with anyone. Disadvantages include termination of the organization and personal liability of the owner.

Step-by-step solution

Explanation on Sole Proprietorship

Sole proprietorship is one of the forms of business organization in which there is only one owner.

Advantages and disadvantages

Advantages are as follows:

• There is only a single owner of the business who receives all profits.
• The profits are not shared with anyone in the organization.

Disadvantages are as follows:

• It can be terminated at the death of the owner or at the will of the owner.
• The personal property of the owner can be used to repay the debts of the businesses.