Question

explain any six advantage of sole proprietor in short.

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Answer 1

Answer:One of the functional advantages of sole proprietorships is that they are easier to set up than other business entities. A person becomes a sole proprietor simply by running a business. Another functional advantage of a sole proprietorship is that the owner maintains 100% control and ownership of the business.

Explanation:

Answer 2

Answer:

1. Control

Perhaps the greatest advantage of a sole proprietorship is how much authority you maintain over your business. While there are laws each business must abide by at a local, state and federal level, the amount of flexibility sole proprietors have is unparalleled in other business structures.

2. Easy Setup & Low Cost

Since there is no profit-sharing, the amount of paperwork and documentation needed to set up a sole proprietorship is minimal. Compared to other business structures, the whole process is relatively simple.

3. No Corporate Business Taxes or Double Taxation

One of the most attractive features of a sole proprietorship is that your business avoids paying taxes on profit (unlike a C Corporation, for example).  

Because sole proprietorships are directly connected with their owners, business income is earned by and directly passed to the owner. As a result, sole proprietorship taxes are paid as part of your personal income taxes.

4. No Annual Reports or Filings

Sole proprietors are able to keep certain financial information about their businesses private. Other business structures, like S-Corps and C-Corps, are registered with the state and are required to file annual reports with state agencies that are often made available to the public as part of the business’s official record.

5. Not Restricted by Formality

There are several other common business procedures that sole proprietors may forego, which further protects your privacy and control of the business. For example, sole proprietors are not obligated to perform certain oversight tasks required of other business structures

6. Simple Record Keeping

Because there is no legal separation between an owner and a sole proprietorship, you can deposit your business revenue and pay business bills directly through your personal bank account.

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