Question

open-ended question
summarize what you understood about a sole proprietorship.
type your answer here

Explanation:

A sole proprietorship is a business owned and run by one individual. It has easy setup (few legal formalities), the owner has full control and keeps all profits. However, the owner has unlimited liability (personal assets at risk for business debts), limited resources (due to one owner’s capital), and lack of continuity (business ends with owner’s death/exit). It’s common in small businesses like local shops, freelancing.

Answer:

A sole proprietorship is a business structure owned and operated by a single individual. Key aspects:

• Ownership & Control: One person owns and manages the business, having full decision - making power.
• Formation: Easy to establish, with minimal legal formalities and low startup costs.
• Profit & Liability: The owner retains all profits but has unlimited liability (personal assets can be used to settle business debts).
• Resources & Continuity: Often has limited access to capital (due to one - owner funding) and lacks continuity (business may end if the owner dies, retires, or exits).
• Common Use: Popular for small - scale ventures (e.g., local stores, freelance services).