| Sole Proprietorship | Description | In a sole proprietorship, the business and single owner are one in the same. A single owner makes all decisions with regard to the business and the single owner retains all profits earned by the business. The single owner is also responsible/liable for all debts and obligations of the business on a personal level. | Two Advantages | A sole proprietorship is easy to create; there is minimal creation cost and time.The single owner has autonomy in decision making; sole owner makes all decisions related to the business and has complete ownership of business’s finances. | Two Disadvantages | It is impossible to add additional owners and to pass on business, business dies with owner. A single owner faces challenges with raising working capital and all loans made for the business are the personal responsibility of the owner. In addition, the single owner may be sued personally for the business’s liabilities. | Liability | Liability is unlimited; obligations of the business are personal obligations of the owner. The single owner is 100% personally responsible for business liabilities and debts. All of the owner’s personal assets are subject to lawsuit(s) made against the business. | Income taxes | The business itself does not file a tax return. There is no legal distinction between the owner and the business. All income earned by the business is considered personal oncome by the owner. Owner faces a higher rate of taxation because all business profits are considered personal income. | Continuity of the organization | There is no continuity in a sole proprietorship. The business ceases to exist if the single owner dies. The business can only have one owner and therefore, dies with the owner. The owner cannot pass on the business to another person; the owner can only sell or gift company assets. | Control | All control of the