Sole Proprietorship: Overview, Characteristics, Pros & Cons
A sole proprietorship is the most basic and commonly used form of business ownership. It is run by a single individual and isn’t legally separate from the owner. This means the owner is personally liable for any debts or obligations the business incurs. Sole proprietorships are easy and inexpensive to establish, require minimal formalities, and allow the owner full control over operations and profits. They're ideal for freelancers, small retailers, and consultants seeking simplicity over structure. Key Characteristics of a Sole Proprietorship Single Ownership The business is owned and managed by one person who has total authority over decisions and operations. Unlimited Liability The owner is personally responsible for all business debts. If the business can't meet its obligations, personal assets can be at risk. Simple Setup Starting a sole proprietorship is quick and straightforward. It often just requires a license or local registration. Full Control All m...