A sole proprietorship is a kind of enterprise owned and run by only a person in which there is no

legal difference between the business entity as well as the owner. It is not compulsory in sole

proprietorship that a sole trader has to work alone; they can employ other people to work for

them, which can be helpful to enhance the business.

Here are some sole proprietorship drawbacks which are the following

 Unlimited Liability (a drawback of the sole proprietorship is no protection from

responsibility and Liability).

 Difficulty in raising capital (a significant challenge of owning a sole proprietorship is the

problem in raising capital)

 Selling the business (person feel faces difficulties while selling or running their business

or selling products or services)

 Less Financial control

 Risk in decision making

 Limited management skills (Mitchell & Fontana, 2020)

Reference

https://www.youtube.com/watch?v=0k8ljlnBAQI

Mitchell, P., & Fontana, P. K. (2010). Choosing the right legal form of business: The complete

guide to becoming a sole proprietor, partnership, LLC, or corporation. Atlantic

Publishing Company.