Sole Proprietorship Advantages and Disadvantages

Alternatives

Other options for business structures

Individual Owner

The sole proprietor who is the business

Autonomy

Ability of the owner to make decisions and control the business

Insurance

Coverage to protect against financial loss

Business Assets

Equipment, inventory, customer lists, and goodwill

Breach of Contract

Failure to fulfill the terms of a contract

Venture Capital

Funding from institutional investors and high net-worth individuals for start-ups

Working Capital

Funds needed for day-to-day operations and business growth

Permits and Licenses

Governmental approvals required for certain businesses to operate

Sole Proprietor

Individual owner of a business with unlimited liability

Business Law

Legal framework governing business activities

Lily's Landscaping

Lily's business that provides landscaping services

Personal Loan

Loan obtained by the sole proprietor as an individual

Unlimited Liability

Owner's personal responsibility for all business debts and obligations

Creditors

Parties to whom the business owes money

Personal Collateral

Personal assets used to guarantee a loan

Initial Public Offering (IPO)

Sale of a private company's shares to the public

Tax Planning

Strategies to minimize tax liabilities

Ownership

Total control and possession of the business's finances