Sole proprietorship refers to the individual ownership of a business. Here one individual is at the helm taking all the important policy decisions. There is a single chain of command. Also, the responsibility to pay taxes rests on the sole owner’s shoulders. Let us discuss sole proprietorship in detail.
Advantages & Disadvantages of Sole Proprietorship
A sole proprietorship signifies the simplest form of business that can be owned in Canada. A single owner has all the reigns under his command in this form of business. Under the Canadian law, the owner and the business are considered one single entity. So, these two entities are viewed as one in the eyes of the law and proceedings are carried out accordingly. Secondly, the owner owns all the assets and resources of the business. Most importantly, the sole proprietor cannot claim employee status under his/her own business. He shall not receive a salary from the business. Instead, he can earn a profit from the business operations. So, the owner cannot be the employee in case of sole proprietorship.
Now let us discuss the advantages and disadvantages in case of sole proprietorship.