MANAGEMENT

Detailed explanation-1: -Unfortunately, in a sole proprietorship, there is no way to sell shares, as there is only one owner of the company and that ownership cannot be split in order to raise capital. This makes it hard for a sole proprietor to find ways to raise capital for advertising and new products and services.

Detailed explanation-2: -As a sole trader, the business owner and company are one and the same for legal purposes. So, you are liable for all company debts. The proprietor bears any liabilities or obligations owed by the business, so there’s an increased risk that it will impact your personal finances and assets if the company fails.

Detailed explanation-3: -Sole proprietorships may have problems when it comes to raising capital. Investors very rarely invest in sole proprietorships because there is no personal asset protection. In addition, sole proprietorships may have difficulty acquiring loans from banks and other lenders because of credibility issues.