The concept of the individual entrepreneur, also known as an autonomous individual company, is a person who is engaged in an economic or professional activity on their own account. By the definition of individual entrepreneur we understand that there is no fragmentation at either the legal or judicial level, of who the owner and the business are.
One of the characteristics of an individual entrepreneur is that the entrepreneur is solely responsible for the debts of the business and who will be in charge of managing the entire company, for both economic activity and accounting related to it.
Advantages and Disadvantages of the Individual Entrepreneur
An entrepreneurial business is a sole proprietorship, thus the advantages and disadvantages of the individual entrepreneur are determined by their commercial nature and depend directly on their responsibility for the nature of this type of company. These are some of the particular advantages and disadvantages of this type of company:
- It is an easy-to-build company since the owner has full power to make decisions.
- Being a single employer, all the benefits are for themself.
- The social responsibility of this type of company is unlimited, therefore the individual entrepreneur will be the only one who will have to face the debts and can solely respond for the entity.
- All costs and investment will always be assumed by the entrepreneur and not by third parties, thereby keeping control 100% within the entrepreneur’s grasp.
- It can end up being a Limited Liability Company, since as the company grows, risk and losses increase. Therefore, at some point, creating a corporation is the most feasible solution.