What is a Sole Proprietorship Company?


Establishing a company is a crucial step for entrepreneurs to enter the business world. However, choosing the right option among the many available can initially seem complex. Sole proprietorship, also known as "hiosis," is one such option that offers significant advantages to business owners. In this article, we will delve into what hiosis, or sole proprietorship, is, along with its advantages and disadvantages.

What is Hiosis? Hiosis, according to the Turkish Commercial Code, is a type of business structure chosen by individuals to engage in commercial activities. In essence, hiosis refers to an individual conducting commercial activities under their own name and responsibility. In this structure, there is no distinction between the business owner and the business itself; therefore, the business owner is personally liable for all debts of the business.


  1. Easy Establishment: Setting up hiosis involves fewer formalities compared to other types of businesses. Particularly, there are fewer restrictions regarding the amount of capital and establishment procedures.
  2. Flexibility: Hiosis owners have more flexibility in managing their businesses and organizing their activities as they see fit. This enables the business to adapt more quickly to changing market conditions.
  3. Tax Benefits: Hiosis owners can report business income on their personal income tax returns. This may provide tax advantages and help optimize tax payments.


  1. Limited Capital: One of the major disadvantages of hiosis is that there is no legal distinction between the business owner and the business itself. Consequently, the business owner is personally liable for all debts of the business. This limitation may restrict business growth and risk-taking.
  2. Difficulty Accessing Credit: Hiosis owners may encounter difficulties accessing financing when they seek to secure funding for their businesses. Banks and financial institutions may perceive sole proprietorships as riskier and may reject loan applications or demand high-interest rates.
  3. Limited Expertise: Since hiosis owners are required to manage their businesses alone, their expertise may be limited as the business grows. Particularly if the business owner has limited knowledge and experience in certain areas, there may be deficiencies in specialized areas.

Conclusion: While hiosis offers advantages such as easy establishment and flexibility, it also comes with disadvantages such as personal liability and limited capital. Therefore, it is important for business owners to carefully assess which business structure is most suitable for their needs. Seeking professional advice and selecting a structure that aligns with the requirements of the business are crucial steps in establishing a successful enterprise.


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