Sole Proprietorship Disadvantages

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Sole proprietorship is a type of business owned, managed, and operated by a single individual. Company profits are treated just like the owner’s income, and any money owed by the company incurs are considered to be the owner’s personal debts. One advantage of a sole proprietorship is that compared to the other forms of ownership, there are minimal cost and paper work involved with forming it (Kelly & Williams 2017). It’s an advantage for entrepreneurs who are ready to start a business. The owner has complete control of the business and can operate it how he or she chooses. Another advantage of a sole proprietorship is the owner has a feeling of pride ant personal satisfaction. There are not many legal requirements for a sole proprietorship company to operate. Low monitoring charges among the investors gives the company the ability to make on the spot decisions (Baik, Lee &Lee 2015). Another reason the sole proprietorship company has an advantage is that there is a low chance of being threating by competitors. One of the disadvantages of a sole proprietorship is the lack of ability to raise money for the company. Suppliers or creditors may not be willing to lend money or resources to the individual. The company has to rely on their own money or wealth in which they generate. Personal debts and any other unforeseen events is the owner’s responsibility (Kelly & Williams 2017). For instance if the sole proprietorship company gets sued and the person suing wins, the court can

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