Sole proprietorship / sole proprietorship

The sole proprietorship is a commercial enterprise that is run by a single person.

Definition / explanation

The company is shaped exclusively by the person of the owner. The development and survival of the company depend on it. The sole proprietor:

  • only provides the equity for the foundation
  • is liable with all his business and private assets
  • manages the company alone (management)
  • represents the company towards third parties (representation)
  • receives all of the profit

The company of the sole trader contains the family name and at least one full first name. An addition may not indicate a corporate relationship. Unless a minor merchant, the company must be registered with the commercial register.
Die Einzelunternehmung bietet sich immer dann an, wenn ein Unternehmer allein entscheiden will, seinen business rasch an neue Veränderungen anpassen muss oder den erzielten Gewinn nicht teilen möchte.

Disadvantages of sole proprietorship

Disadvantages of sole proprietorship are the high risk due to unlimited liability, the low capital base and the personal ties between the entrepreneur and the company, which can have a particularly negative impact on the succession plan in the event of a lack of family members. Despite the disadvantages, this legal form of the company is particularly widespread in the craft and medium-sized trade.

Termination of sole proprietorship

The sole proprietorship is ended by:

  • voluntary dissolution by the owner (liquidation)
  • the sale of the company to a third party
  • the change of the legal form 'In a society
  • the compulsory dissolution of the company through bankruptcy
  • the death of the owner
Was the explanation to "Sole proprietorship / sole proprietorship"Helpful? Rate now:

Weitere Erklärungen zu Rechtsformen