Sole proprietorship is the simplest form of business entity which refers to a form of business organization involving one person, and the person and the business are essentially the same. Sole proprietorships are the most prevalent form of business organization. The two most important advantages of a sole proprietorship are that the owner maintains complete control over the business and that business losses can be deducted against the owner’s personal tax return.
Sole proprietorship is the business ownership in which there is no legal distinction between the sole proprietors status as an individual and his or her status as a business owner.
The sole proprietorship, as the name implies, is a business owned by one individual. It is the oldest and most common type of business.
Sole proprietorships are typically small business operations such as drugstores, variety shops, and delicatessens or service businesses such as barbershops and repairshops.
In the eyes of the law, the owner and the company in a sole proprietoship are inseparable. From a business standpoint the sole proprietor not only owns the business but also is responsible for the operationof the business. In the eyes of the public and business suppliers, the sole proprietor is considered to be the business. But being a sole proprietor does not mean working alone: a sole proprietorship has as many managers and employees as the scope of operations requires.
The advantages of a sole proprietorship are related to its freedomof operation and its simplicity. It also has its drawbacks.