Such a company also known as a business person or private property. The owner has the material resources and capital equipment needed for production activities, or acquires them, and personally supervises the activities of the enterprise.
ADVANTAGES:
1. Sole ownership is easy to establish, as the legal procedure is very easy and recording companies of this kind usually do not require large expenditures. 2. The owner of his own master and has considerable freedom of action. In order to make decisions about what and how to produce. No need to wait for the outcome of any meetings, partners or directors. 3. The owner can provide personalized customer service. 4. Incentives work effectively - the most generous. The owner receives in the case of success and loses everything in the event of failure.
But there are disadvantages of this organizational form, and they are very significant.
DISADVANTAGES:
1. With few exceptions, the financial resources of a single entrepreneur is not sufficient to ensure that the company could grow into a major undertaking. Such as the sole ownership of the percentage of bankruptcy is relatively high, commercial banks are not very happy to give them great credit. 2. Have complete control over the activities of the company, the owner must comply with all the major decisions, for example, buying, selling, attracting and content of staff to keep in focus the technical aspects that may arise in the production, promotion and distribution of products. 3. The most important shortcoming is that, the sole proprietor is subject to unlimited liability. This means that independent entrepreneurs are risking not only the assets of the company, but their personal assets. If a company went bankrupt, he was personally and solely responsible for the debts of the company. For the payment of debts in this case will be sold to private property owner.
