Sole Proprietorship Avery Ferguson, Patrick Prendergast, Michael Barreiro, Juan De Haro, Matthew Perrine, Josh Latham.

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Presentation transcript:

Sole Proprietorship Avery Ferguson, Patrick Prendergast, Michael Barreiro, Juan De Haro, Matthew Perrine, Josh Latham

Sole Proprietorships Business owned and managed by a single individual. This person earns all the firm's profits and is solely responsible for the firm's debts. About 75% of all businesses are sole proprietorships according to the IRS.

Structure Since you are the only owner you assume all liability for losses. However you also have total control of all business decisions and can't be fired.

Advantages One of the main advantages is how easy it is to start up a sole proprietorship. With just a small amount of legal paper work and legal expense, just about anyone can start up a sole proprietorship. Sole Receiver of profit Full control-no one can argue with the owner of the business Easy to discontinue-you can quite or discontinue at your convenience. In addition a sole proprietorship is the least regulated form of business organization.

Disadvantages The independence of a sole proprietorship comes with a high degree of responsibility The biggest disadvantage of a sole proprietorship is the unlimited personal responsibility, including all business debts There is a limited access to resources-Being the sole owner physical capital may be in short supply. If the owner of a sole proprietorship dies or closes shop the business simply ceases to exist.

Examples Look around town. Chances are your local bakery, barber shop or hair salon, mechanic, or corner store are all sole proprietorships.

Sole proprietorships can be highly profitable as the owner receives all the profits. When weighed against the risk of total loss it seems to be only worth the risk if you have tons of capital so if the business fails, you won't go into personal debt.