form of business organization at the head of which stands an individual as one who is responsible, who directs its operations, and alone runs the risk of failure.
single ownership
wholly owned by one individual. the sole proprietor supplies the total capital from his own wealth or from borrowed funds.
one man control
the proprietor alone takes all decisions pertaining to the business.
ownership and management are vested in the same person.
no legal entity
a sole proprietorship has no legal identity separate from its owner.
the law makes no distinction between a proprietor and their business.
if the owner dies or becomes insolvent, the business is dissolved.
unlimited liability
the proprietor is personally liable for all debts.
if the assets are insufficient to meet the debts, the personal property of the proprietor can be attached.
no profit-sharing
the proprietor alone is entitles to all the profits and losses of the business. he bears the complete risk.
