1. Sole proprietorships
A business that is owned by one person
Advantages
1. Economical and Efficient Operation The
owner can control the cost of running the show.
2. Freedom and flexibility
3. The owner has full control over everything.
4. Owners can respond quickly to business needs in the form of day-to-day management
decisions.
5. Sole proprietorships are usually free from government oversight and special taxation.
Disadvantages
1. A sole proprietorship has unlimited liability and is responsible for all of the company’s debts.
This can exceed the entrepreneur’s total investment in the business. His debts include all of
his assets, including his house and the belongings of the entrepreneur.
2. Maybe the available capital is much smaller than other business organizations.
3. Sole proprietorships can be difficult to obtain long-term financing. Companies are highly
