A second disadvantage of the sole proprietorship is that it has limited capital. This could mean the loss of personal property such as automobiles, homes and savings. If a business fails, the owner must personally assume the debts. All debts and all problems associated with the business belong to the owner. A very serious one is unlimited liability that each proprietor faces. Sole proprietors also have the opportunity to achieve success and recognition through their individual efforts. They have minimal legal restrictions and do not have to pay the special taxes placed on corporations. Sole proprietors own all profit of their enterprises, and they are their “own bosses,” free to make whatever changes they please. The reason for their popularity is that they are the easiest and least costly to organize. Sole proprietorships are the most numerous kind of business organization, but most are very small. A sole proprietorshipis a business owned by one person. Other kinds of business organizations are sole proprietorships and partnerships. A corporation is one kind of business organization. Steven Jobs and many other entrepreneurs have organized their companies as corporations.
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