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Advantages and Disadvantages of Individual Enterprise

There are several opportunities for entrepreneurs at the business registration. One can think of the corporation, the partnership, trusts, etc. Individual company offers several advantages and disadvantages to its leaders. In the West, it is the most popular business form, more than 70% of companies are sole proprietorships. Yet it is clear that the popularity of individual business mainly comes from its accessibility and its simple management. People are not always informed about the risks and disadvantages that come with running a sole proprietorship. So let’s take a moment to recognize and reflect on the key benefits and the main disadvantages of the individual enterprise.

The Benefits of Individual Enterprise

One of the clear advantages that comes with the creation of a sole proprietorship is that this creation is simple and easier to access than other forms of enterprise. Indeed, during the business creation process, it is not necessary to make a public offering, issuing action, drafting statutes, to undergo an audit or mission examination. The tax level, management and report delivery is also very simple.

Another advantage is the fact that the component is its own leader. It therefore makes decisions for the company, engages its employees and takes the order from any higher. Other types of business, for their part, tend to divide power between the partners or shareholders.There are of course other more secondary benefits to the creation of an individual company. However, the main two are clearly the simple in creation and direction.

The Disadvantages of Individual Enterprise

The creation and management of an individual business comes with its share of disadvantages including the leader must absolutely be aware. These risks may be dangerous or not, depending on the experience of the director and the financial health of the company.

The main disadvantage that comes with the creation of a sole proprietorship is the merger of the assets of the individual company and that of the head. Thus, if the company were to have financial health problems, the creditors could, after carrying out the liquidation of the company, have access to the property manager and seize or sell if they are not fully refunded. These risks may even extend to the spouse as well, if no marriage contract defining the separation of assets is in place.

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