Sole Proprietorship:
Any individual who operates a business and includes profit in his / her personal tax is called a sole proprietor.
He / She can operate in personal name or a trade name.
Profit or losses are reported on form T2125 (Statement of Business Income).
If an individual has more than one business, he / she should file a separate T2125 for each business.
Sole proprietorship is the easiest way to start a business. Name registration of business is not mandatory. Sole proprietorship provides the least government regulations.
A sole proprietor is fully responsible for the profit or loss of the business.
As a sole proprietor, you are fully responsible for all the liabilities. In case of losses, one may have to sell his / her assets to cover business liabilities.
Upon death of the owner business will cease.
Raising capital can be a serious issue if you operate as sole proprietor.
