Sole Proprietorship

·   Individual who owns a business in his/her personal name

Advantages

·   Few government and legal formalities

·   Personal tax rate is lower

·   Low start up costs

·   All profits go to owner

·   Freedom of operation

·   Ease of dissolution

·   Business loses can be offset by owner’s other income

In the early phases there are more advantages, as the business gets going (corporation)

Disadvantages

·   Owner is liable for debts/obligations

·   Perception of low level business sophistication

·   Some gov. loans only available to certain companies (corporations)

·   Cannot collect EI benefits if business fails.