What is an advantage of forming a sole proprietorship?

A sole proprietorship offers a significant advantage in terms of low startup costs. This is primarily because it is the simplest business structure and does not require extensive legal formalities to establish, unlike corporations or partnerships. Entrepreneurs can typically set up a sole proprietorship with minimal financial investment, as there are fewer initial fees and less bureaucratic overhead involved. This accessibility makes it an attractive option for individuals looking to start their own business without a large financial burden.

The simplicity of forming a sole proprietorship also means that the owner retains complete control over the business decisions and profits, allowing for a straightforward operational structure. In contrast, options with higher legal restrictions, complex ownership arrangements, or requirements to share profits would not be characteristic of a sole proprietorship, further reinforcing the benefits of lower startup costs associated with this type of business.