Sole Proprietorship

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Sole Proprietorship

Sole proprietorship is a form of business entity which is set up solely by one person only. Everything within this kind of entity will be the responsibility of this one owner. For this entity, his liability is unlimitedUnlimited liability means that the owner will be personally liable for the debts owing by his/her Sole Proprietor business.

A further elaboration on the meaning of unlimited liability is this: if the Sole Proprietor business fails or unable to repay its debts, the creditors have the right to sue and obtain a court order to claim the debts owing by the business, against his personal assets. Personal assets mean cash savings, houses, cars and any other "cash-able" items own by him in order to repay debts created by the Sole Proprietorship.

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