Sole Proprietorship is the oldest form of business and defined as the business which is owned by a single owner who is known as Sole Proprietor. It benefits secrecy and ownership of full profit is one from its chief characteristics. Following are the comparisons of Sole Proprietorship with other partnerships and companies.
As it has a single owner so there is no concept of profit distribution as other companies and partnership distributes profit to all of the owners.
It is easy to dissolve this partnership; Not much time and cost is required to take it to the end while in other companies and partnerships you need permission of each of the partner, registrar, and court except that you need much time and money too.
In this all kind of taxes are saved because income tax is only imposed on the owner once and there is no income tax on the form of business while in others they have to pay corporate taxes.
Here owner takes personal interest and offers maximum of his services and energy for the growth of his business while anywhere else this do not happens because the whole operation of business is executed by the employees who are not interested in the development.
The company and partnership will have to follow many laws, rules and regulations from which the Sole Proprietorship is exempted.
Secrecy can be easily maintained over here which is an important element of any business. In other companies or partnerships this cannot be maintained because all of the affairs have to be printed and then have to be distributed to all of the shareholders, bankers and stock exchange.
This type of ownership enjoys credit standing because the liabilities of this is not limited the investment of the owner. Hence, the lender willingly offers credit to it.
It offers freedom of actions; owner makes his own decisions without any pressure from anyone. This saves the business from any complications, fights and time wastage.
The formation of Sole Proprietorship does not involve any formation cost while anywhere else formation needs heavy expenditure.
