A sole proprietorship refers to that form of business organization which is run and owned by a single person who is also the owner of the firm. Under sole proprietorship there is no difference between the firm and the owner unlike a company which is a separate legal entity apart from its owners. Given below are various advantages of a sole proprietorship –
1. Under sole proprietorship it is the owner who takes all the decisions regarding the business so he or she has the complete authority and therefore any reward out of those decisions will belong to only to the sole proprietor.
2. Sole proprietorship is easy to establish as compared to either establishing a company or a partnership firm.
3. Under sole proprietorship profits are taxed only once which is not the case with the listed companies, which have to pay tax not only on profits but also on dividend which it gives to the shareholders of the company.
4. Sole proprietor does not have to publish the results like a listed company and also this type of business does not need to follow strict guideline of stock exchanges and other regulatory bodies.
5. Another advantage of sole proprietorship is that there is no risk of any loss due to others actions which happen in case of partnership or a company.