A proprietorship has three important advantages: $(1)$ It is easily and inexpensively formed, $(2)$ it is subject to

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government regulations, and $(3)$ it is subject to lower income taxes than are

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$.$ However, a proprietorship also has three important limitations: $(1)$ A proprietor has

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personal liability for the business' debts. $(2)$ The life of the business is limited to the life of the individual who created it$.(3)$ A proprietorship has difficulty obtaining large sums of capital so proprietorships are used primarily for small businesses.