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Chapter 1: Q. 4SE (page 33)

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

Expert verified

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

01

Explanation on Sole Proprietorship

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

02

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.

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Most popular questions from this chapter

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