The sole or single proprietorship is a business structure for a firm that is owned and operated by one person. To establish a sole proprietorship, all you need to do is obtain whatever licenses are needed in your local area to begin operations. This means it is the easiest legal structure to set up, and it is also the most used form of small business legal structure.
Advantages of the Sole Proprietorship
• Ease and speed of formation: There are fewer formalities and legal restrictions with this form. A sole proprietorship requires little or no government approval and you usually need to spend only a few minutes with your city or county clerk to obtain a relatively inexpensive business license.
• Reduced startup expenses: There are minimal license fees and less legal help needed to set up this type of business organization.
• Complete control: Since there are no partners or other owners to consult with, you have total control over the business, and you can run it as you see fit. You make all the decisions. There is no board of directors or any other boss, except your customers, to direct you, tell you what to do, supervise the decisions you make, or criticize your errors. As a result, you can quickly respond to business needs on a day-to-day basis. Win, lose, or draw, you are the whole show and what you say goes.
• Sole recipient of profits: Because you are the sole proprietor, you are not required to share profits with anyone.
• Termination: Termination is also very easy with a sole proprietorship. You can liquidate your assets, pay your debts, turn out the light, and your entire operation is completely shut down. Or you can sell your business, if you wish to do so, with few restrictions. With a sole proprietorship, it is as easy to get out of business as it was to get into business.