Explain Sole Proprietorships and its Implications

Question

Explain Sole Proprietorships and Implications of Sole Proprietorship?

Answer 1

A sole proprietorship is one individual carrying on business on his or her own (under his or her own name or a business name) without adopting any other form of business organization such as incorporation. The business and the person are one and the same, the sole proprietorship brings with it three key implications such as:

Implications of Sole Proprietorship

1. To complete all contracts entered into by the business.

2. For any torts committed in the course of undertaking business activities, including being vicariously liable for the torts of employees.

3. The income/losses of the business for tax purposes.