Dissolution of sole proprietorships

DISSOLUTION OF SOLE PROPRIATORSHIP

Dissolution refers to the termination of the legal life of a business. The following circumstances may lead to the dissolution of a sole proprietorship:




  • Death or insanity of the owner.
  • Transfer of the business to another person- this transfers the rights and obligations of the business to the new owner.
  • Bankruptcy of the owner- this means that the owner lacks the financial capability to run the business.
  • The owner voluntarily decides to dissolve the business e.g due to continued loss making.
  • Passing of a law which renders the activities of the business illegal.
  • The expiry of the period during which the business was meant to operate

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  1. Pingback: 9 DISADVANTAGES OF SOLE PROPRIETORSHIP
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