SOLEPROPRIETORSHIP

Group » MBA 2nd Semester

Nazish Masood R# 434 Sidra Riaz R# 429 Syeda Fatima R# 427Arif ullah #463

Overview

• Describe characteristics of a sole proprietorship.

• List advantages of a sole proprietorship.

• List disadvantages of a sole proprietorship.

Key Terms

•Business entity

•Sole proprietorship

•Unlimited liability

A sole proprietorship is a business entity with a single owner/operator.

A business entity is a professional organization offering something that has real existence.

The following factors characterize a sole proprietorship.

A. It is the oldest, most common, and simplest form of business organization.

B. One person can serve as the business decision-maker.

C. No registration with the state is required, as is necessary with a corporation or a limited liability company (LLC).

D. It is easily set up and maintained.

E. The owner is personally responsible for assets, income taxes, and business debts.

F. It is relatively simple to manage and control.

A sole proprietorship has several advantages.

A. The owner is his or her own boss.

B. No legal formalities are involved in forming or dissolving the business.

C. The money the business makes belongs to the owner.

D. Decisions can be made quickly.

E. Start-up costs may be minimal.

F. A sole proprietorship is a good type of organization for a business: 1. That will remain small 2. That does not have great

exposure to liability

A sole proprietorship has several disadvantages.

A. Raising capital to start the business is difficult.

1. Banks are less willing to lend money to one person for a business venture.

2. Banks that approve loans may have higher interest rates.

B. The owner has unlimited liability. Both the business and personal

assets of the sole proprietor are subject to the claims of creditors.

When the owner assumes unlimited liability, he or she may lose all personal and business assets to pay bills or money owed to other parties.

C. The business ends if the owner dies.

G. The sole proprietor must pay a self-employment tax, which consists of contributions to Social Security and Medicare. In addition, he or she must

pay estimated taxes throughout the year.

H. The sole proprietor may have to register the business name and pay local taxes for owning a business.

Laiba’s Collection (2001) Sole Proprietor Business Owner Miss Naheed Akhtar Initial investment 2000 rupees Currently has assets of worths 0.3 million (2013) Current outlet Hayatabad Phase 7 Contact 091-5863429 Supported by WBDC and SMEDA

Laibas Collection mission is to offer quality clothes in an assortment of sizes and styles to accommodate

all varying body styles and shapes to satisfy their customers with all aspects of their needs and also by

providing quality tailoring on spot

To capture the local market and to compete in the competitive environment

The business deals in ladies garments Embroidery Bridal wears (ready made & on order) Casual wears (ready made & on order) Small kurtas for baby girls Bed sheets and complete bed sheets (on Order) Tailoring facility on spot

To promote the labor present in the villages near D.I.Khan (kaneri village)

To provide them with employment opportunities

To provide customers with better services

http://en.wikipedia.org/wiki/Sole_proprietorship

http://www.investopedia.com/terms/s/soleproprietorship.asp

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Sole-Proprietorships

http://www.entrepreneur.com/encyclopedia/sole-proprietorship

http://www.businessdictionary.com/definition/sole-proprietorship.html

Naheed Akhtar (owner)

Thank You