List Two Disadvantages of Sole Proprietorship & Explain Them.
▪︎Unlimited Liability
- The main factor being that there is no limit on the debt that can be accumulated. Which can cause the business to become insolvent very quickly.
- This means that even personal assets are allowed to be repossessed by the bank.
▪︎Single Person Tax
- The main factor being that you will be taxed as a separate entity, therefore doubling the total expenses. You must now, pay tax for your personal life & for your work life.
- This can become extremely expensive & turn into a less profitable business.
