Proprietorship

A proprietorship is a single ownership business which under management of one person.

Key characteristic of a proprietorship

1.       Unlimited liability. The owner is personally liable for debts and obligation of his business.

2.       Personal taxes. Owner pays personal income taxes on profits.

3.       Liquidation upon death of the owner. There is no future for the firm when the owner dies.

4.       The business has maximum secrecy because no business reporting is done.

5.       No legal documents like permit and license are required.

6.       No one to lend money for capital because of suspicion and no guarantor for payments.

7.       Can not sell stock to public.

8.       Owner can lose personal property to pay debts.

9.   Owner can sell business as a property.