You gotta have Sole
Overview: What is a Sole Proprietorship?
A sole proprietorship is the most simple form under which a business can be run. It does not create a legal entity such as a corporation or monopoly does. All it means is that a single person is responsible for the debts of the business. It can operate under a fictitious name that is not that of the owner, similar to a pen name. It does not create a separate legal entity.
- A sole proprietor has control and decision-making power over the business.
- Sale or transfer can take place at the discretion of the sole proprietor.
- No corporate tax payments.
- Minimal legal costs to forming a sole proprietorship.
- Few formal business requirements.
- The sole proprietor of the business can be held personally responsible for the debts and obligations of the business.
- All responsibilities and business decisions fall on the shoulders of the sole proprietor.
- Investors will not usually invest in sole proprietorship.
Examples of Sole Proprietorships
An example of a sole proprietorship would be a landscaping company or a car repair company. Because sole proprietorships often require a change in ownership policy to grow, there are no examples of well known proprietorships. Walmart was once one, it started out as a single store but is now a nationwide corporation. Sole proprietorships are often sink or swim because it relies on the owner's ability to make a profit or to not do so. When one fails, it is usually because it could not meet market equilibrium or could not pay back their start up loans.