List the advantages and disadvantages of a sole proprietorship over other forms of business organization
What will be an ideal response?
The advantages of a sole proprietorship over other forms of business organization are as follows:
a. Only one individual is involved which indicates ease of formation.
b. Total control belongs to one individual. The individual may dissolve the sole proprietorship at any time.
c. A sole proprietorship is subject to less government regulation at all levels.
The disadvantages of a sole proprietorship over other forms of business organization are as follows:
a. The proprietor is personally liable for almost all assets, both personal and business.
b. The individual pays all taxes on profits made by the business. Ownership cannot be transferred.
c. As a single proprietorship grows, it must gain maturity as to regulation, and management thereof, to be successful. Often, individuals lack the sophistication to make the next step and take the business to the next level.
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