Nature of sole proprietorships

Many chose to incorporate a sole proprietorship because it is the easiest and least costly of all business structures to set up, unlike the set up of other forms of business where there will be so many formalities and compliance requirements.

One major advantage of a sole proprietorship all profits generated will go directly to the sole proprietor.

The downside to this is that in a sole proprietorship, the business and its owner are considered a single legal entity. This means that the business owner is personally liable for the debts of the business and any other legal action taken against it. You can also be sued in a personal capacity and the worst of it all, it will deem you to have an unlimited liability. Therefore, if anything of such happens, it will put your personal assets at risk.