What is Sole Proprietary Business? - Explained

What is Sole Proprietary Business? - Explained

Among the number of business types which does exists in the world, Sole Propitiatory is a type of business ownership what a business could have. By the name itself, sole Proprietary businesses do have only one owner.

Business ownership types does provide some advantages as well as disadvantages to the business and to the business owner. Sole Proprietary business type also do have advantages and disadvantages towards the business owners and sustainability of the business as well. 

More Control

Sole Proprietary businesses do provide the owner a better control in the business since there's only one owner in the business who is making decisions. Unlike limited liability companies or public limited liability companies, Sole Proprietary business owners do not need to depend on another party or group of other directors to make a decision collectively. Independent decision making bring the business to be more agile and fast track the decision making process.

Since the there's only one business owner to make decisions, there could be moments where the business owner makes wrong decisions and making the business to go bankrupt or bad decision which could lead the business to loss huge amount of cash.

Not Recognized as a Separate Entity 

Sole Proprietary businesses aren't recognized as a separate entity like limited liability companies due to the nature of documentation and considering other factors in almost all the countries in the world. Because Sole Proprietary business isn't considered as a separate entity, owners do have an unlimited liability which cost them to repay any amount if the business could go bankrupt from their personal assets which could be more than what they invested to the business.


Sole Proprietary businesses are always depending on only one business owner and the business owner is the person who is making decisions with regards to the business. There could be any time where the business owner met with an accident and hospitalized for sometime and the business could loose sales and revenue because there's no person to guide the employees in the business.

Many Sole Proprietary business are carrying a risk of failing and un-sustainability factors compared with other business entities which does exists in the world.