What are the advantages and disadvantages of Sole Proprietorship?

Since, the profits and liabilities rest on one single person, incorporating a Sole Proprietorship has both pros and cons to it, namely:

ADVANTAGES:

  • easy, simplified registration;
  • profits are directly accrued;
  • helpful for small businesses;
  • flexible form of conducting business for small interval of time.

DISADVANTAGES:

  • Personal liability of owner and losses directly affect him;
  • difficulty in obtaining bank loans or lines of credit;
  • non-transferability and non-heritability.

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