Sole Proprietorship Identify characteristics of sole proprietorships Business

Sole Proprietorship Identify characteristics of sole proprietorships. Business Organization Sole Proprietorship Zoning Laws Liability BAUMAN 2019

A business is formed to carry on commercial enterprise. BAUMAN 2019

Sole Proprietorship • Business owned and operated by an individual. • Most in the US are sole proprietorships. • Account for a small percentage of total sales in the U. S. A. BAUMAN 2019

Advantages of Sole Proprietorships • Owner to make all decisions. • Owner keeps all profits after taxes. • Own boss. E. Napp

Disadvantages of Sole Proprietorships • Owner has unlimited personal liability. • Liability is the legal obligation to pay all debts. BAUMAN 2019

If the business is sued, the sole proprietor can lose not only the business but his personal property. BAUMAN 2019

Zoning Laws • Restrict where businesses can be located. • Generally, towns have business districts and residential neighborhoods. BAUMAN 2019

Fringe Benefits • Sole proprietors have a hard time attracting good workers because they cannot afford fringe benefits. • Fringe benefits are payments other than salaries. • Paid vacation and health insurance are examples of fringe benefits. BAUMAN 2019

Health insurance is a fringe benefit. Sole proprietors usually cannot afford to offer their workers such benefits. BAUMAN 2019

A sole proprietorship is the least-regulated form of business in the US BAUMAN 2019

Questions for Reflection: 1. Define business organization. 2. What is a sole proprietorship and why is it the most common form of business organization in the United States? 3. Why do sole proprietors have unlimited personal liability? 4. What are zoning laws and how do they affect neighborhoods? BAUMAN 2019