Weaknesses Or Drawbacks Of Sole Proprietorship Business

Weaknesses Or Drawbacks:-

Sole proprietorship has following weaknesses or drawbacks:-

1. The owner has unlimited personal liability. The total wealth of the owner should be used to pay the debt or to borne the loss.
2. It has limited capacity to raise fund because the funds are available only from his own source and the loans taken from personal security. It obstructs the development of business.
3. The sole proprietor should be Jack-all-trades which is not possible.
4. It is difficult to provide long-term occupational opportunity to the employees.
5. There is no continuity in the business. If the entrepreneur dies, the business is dissolved
6. If the business increases, the proprietor will have to employ trained person as financial and accounting staff or other staffs. They may desire to have partial ownership. It is called non-financial weakness.