Sole Proprietorship
A business that is owned and managed by a single individual.
What is a sole proprietorship?
Sole proprietorship earns all of the firms profits and is responsible for all of the firms debts. This type of firm is by far the most popular in the U.S. According to the Revenue Service, about 75 percent of all businesses are sole proprietorships. Most sole proprietorships are small, however. All together they generate only about 6 percent of all U.S.
Key Terms
Business Organization - an establishment formed to carry on commercial enterprise
Business License - authorization to start a business issued by the local government
Zoning Law - Law in a city or a town that designates separate areas for residency and for the business
Liability - the legally bound obligation to pay debts
Fringe Benefit - payment other than wages or salaries
Business License - authorization to start a business issued by the local government
Zoning Law - Law in a city or a town that designates separate areas for residency and for the business
Liability - the legally bound obligation to pay debts
Fringe Benefit - payment other than wages or salaries
Advantages
- Easy start up
- Relatively few regalations
- Sole receiver of profit
- Full control
- Easy to discontinue
Disadvantages
- Unlimited personal liability
- Limited access to resources
- Lack of performances
Examples
- Pride Ink
- Maui Thing
- Guri Guri
- Takamiya Market
- Sam Satos