Advantage and disadvantage of Sole proprietorship

Question

Illustrate the advantage and disadvantage of Sole proprietorship?

Answer 1

Advantages: easy to set up; proprietor is his/her own boss; because profit is proprietor’s income, there is an incentive to operate the business efficiently.

Disadvantages: financial resources are limited and insufficient; the proprietor is responsible for all of management functions; the proprietor is subject to unlimited liability.