5876443
Description
Mind Map by Lester Stoffels, updated more than 1 year ago
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Created by Lester Stoffels
almost 8 years ago
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Sole Proprietorship
- Advantages
- Cheap to start
- Only a trading licence required
- Owner can easily adapt to
changing circumstances
- Owner makes
independent decisions
- All profits belong
to owner
- No name required by law
Annotations:
- and the name will usually be singular, for example Aviwe's Pie shop
- Owners gain experience
in all aspects of business
- Cheap to start
- Disadvantages
- Capital is limited
Annotations:
- To what one person can contribute
- Unlimited liability
Annotations:
- Means that the personal assets of the owner are at risk.
- Lacks continuity
Annotations:
- The sole proprietorship lack continuity and the form of ownership therefore ends with the owner.
- Owner must perform
variety of tasks
- Finance is difficult
to obtain
Annotations:
- Due to a lack of legal personality.
- Difficult to retain service of
competent employees
- Capital is limited
- Characteristics
- Only a trading licence is required
- Business is not a legal entity
Annotations:
- which means that the owner enters into contracts in his or her own name, can sue and be sued
- Unlimited liability exist
Annotations:
- and therefore the owner may lose personal assets to settle business debts.
- Has no continuity
- If owner dies then
ownership ends
- Is not a legal person and
therefore is not taxed
- Only a trading licence is required
Media attachments
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