The Limitations of Sole Proprietorship

The lack of resources, such as limited savings and restricted access to long-term loans, hinders the growth of a sole proprietorship business.

Limited resources are one of the primary limitations of a sole proprietorship. The owner's savings and borrowings from relatives are the main sources of funding. However, banks are hesitant to provide long-term loans or extend loan limits due to the weak financial position of the business.

In a sole proprietorship, the owner and the business are the same entity.

<p>The closure of a sole proprietorship business can be caused by factors like the death, insolvency, or illness of the proprietor. The lack of a successor or heir also limits the lifespan of the business.</p> Signup and view all the answers

<p>The major disadvantage of a sole proprietorship is that the owner has unlimited liability. This means that the owner is personally responsible for all the business debts and obligations, which can put their personal assets at risk.</p> Signup and view all the answers

<p>Limited resources are a primary limitation of a sole proprietorship. The owner's resources are limited to their savings and borrowings from relatives.</p> Signup and view all the answers

<p>The owner's death, insolvency, or illness can have a detrimental impact on a sole proprietorship business, potentially resulting in its closure.</p> Signup and view all the answers

<p>The major disadvantage of a sole proprietorship is that the owner has unlimited liability.</p> Signup and view all the answers

<p>The lack of resources hinders the growth of a sole proprietorship business.</p> Signup and view all the answers

<p>Limited resources and the lack of successor or heir are reasons why a sole proprietorship business generally remains small.</p> Signup and view all the answers