The simplest form of business is the sole proprietorship, a business owned and operated by one individual.
| Sole Proprietorship Advantages:
| Sole Proprietorship Disadvantages
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| ü Easiest and least expensive form of ownership to organize.
ü Sole proprietors are in complete control, and within the parameters of the law, may make decisions as they see fit.
ü Sole proprietors receive all income generated by the business to keep or reinvest.
ü Profits from the business flow-through directly to the owner's personal tax return.
ü The business is easy to dissolve, if desired.
| ü Sole proprietors have unlimited liability and are legally responsible for all debt against the business. Their business and personal assets are at risk.
ü May be at a disadvantage in raising funds and are often limited to using funds from personal savings or consumer loans.
ü May have a hard time attracting high-calibre employees, or those that are motivated by the opportunity to own a part of the business.
Some employee benefits such as owner's medical insurance premiums are not directly deductible from business income (only partially deductible as an adjustment to income).
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