What is advantage and disadvantages of sole propritorship ??
Answer (1)
9th Jan, 2019
Hello,
Advantages of Sole proprietorship are-
- They are easier to set up than any other business.
- They have tax advantages compared to othe business entities like they do not require separate tax fillings.
- The owner maintains full control and ownership of the business and thus gets entitled to all the profits and control of the organisation.
- Flexible Management
- Direct relationship with his customers
- Increases self employement
Disadvantages of Sole Proprietorship are-
- In sole proprietorship,the owner is personally liable for all the debts or obligations of the business.
- When the owner wishes to include another owner,he will have to dissolve the sole proprietor entity and set up a new business in the form of partnership and get himself registered.
- It faces difficulties in caseof expansion as everything in a sole proprietorship is managed by one owner
- Absence of specialization
- Lack of continuity as if the owner falls sick or dies,it hampers the business and shuts it down.
Hope this helps.
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