Art's grandfather asks you to advise him on what form of business owner - ship he should create. Select a form of ownership for Art's grandfather and list and explain its advantages and disadvantages

The most suitable form of business ownership for Art's grandfather is sole proprietorship.

Explanation:

A sole proprietorship is a type of business formed and controlled by an individual. It is most flexible form of business in terms of capital requirement, registration of business and management.

The capital requirement for a one-man business is usually low unlike company whose start-up capital is much higher and might take some time to raise.

Sole proprietorship is not required to go through daunting process of incorporation as it is with limited liability company. Incorporation is the legal process involved in setting up a company.

The decision making in sole proprietorship is faster unlike a company that would require the board of directors to deliberate on issues before a decision is taken which might take weeks.

The disadvantages of sole proprietorship are discussed thus:

The sole proprietorship business has unlimited liability as the owners would have to pay business debts from private pocket if the liabilities of the business outweigh the assets

The death of a sole proprietor may signals the end of the business unlike a limited liability company where the demise of a shareholder has no impact on the business continuity.