This
form of ownership is the oldest and simplest business entity. The main
rationale for having a sole proprietorship is that it is easy to form,
the
proprietor can freely operate the business as he or she sees fit, and
that
there is no sharing of profits.
Sole
proprietorship is owned by one person. If anybody else becomes
part-owner, the
business is a partnership. The assets and liabilities, taxes, profits
and
losses of the business are the proprietor's assets and liabilities.
When a
proprietor dies, usually so does the business. No legal formalities are
usually
involved. The interest in the sole proprietorship can be transferred
easily.