(a). I recommend converting the sole proprietorship into a private limited liability company.

(b). Sole proprietorship is a one-man business:

• No legal filing requirements.
• No professional advice/fees for auditors/directors is needed to set it up. You just literally go into business on your own and the law will recognize it as having legal form.
• Simplicity—one person does not need a complex organizational structure.
• Less capital requirement.
• Self-actualization and motivation.
• Unity of ownership, control, and management.
• Quick and easy decision making.
• Enjoys 100% benefits/profits.

Disadvantages:

• Not a particularly useful business form for raising capital (money). For most sole traders, the capital will be provided by personal savings or a bank loan.
• Unlimited liability—no difference between the sole trading business and the sole trader himself. As a result, he has personal liability for all the debts of the business. If the business collapses owing money (an insolvent liquidation), then those owed monies by the company (its creditors) can go after the personal assets of the trader (e.g., his or her car or house) in order to get their money back.
• Takes/bears 100% risk/failure/losses—the profits of the business belong to the trader, but so do the losses.
• The business name registration provides no tangible benefit.

Limited liability Company:
Advantages:

• One of the most obvious differences between the company and other forms of business organization is that the members of both private and public companies have limited liability.
• Members of the company are only liable for the amount unpaid on their shares and not for the debts of the company.
• Companies are designed as investment vehicles able to handle larger transactions.
• With larger capital, companies are able to subdivide their capital into small amounts and spread risk.
• Limited liability also minimizes the risk for investors and encourages investment.
• Allow managers to take greater risk in the knowledge that the shareholders will not lose everything.
• The constitution of the company provides a clear organizational structure, which is essential in a business venture where you have large numbers of participants.

Disadvantages:

• Forming a company and complying with company law is expensive and time-consuming.
• Complex organizational form for small businesses, where the Board of Directors and the shareholders are often the same people.
• Bureaucratic management and long decision-making process.
• Loss of some control and dependent on professionals e.g., Auditors/Accountants etc.

However, in small companies like the Hajia one here, the shareholders and Directors will often be the same people. The same people will also be the only employees of the company. There is no real separation of ownership from control, the shareholders are the managers, and therefore most of the statutory assumptions about the company’s organizational structure will not hold. Hajia could still maintain her control and influence as a 100% shareholder within the limits of the law, e.g., having at least two directors.

Support for the bank manager’s position:

• Converting to a limited liability company will facilitate raising capital for expansion, which is critical given the pressure on working capital and plans for two new retail branches and a semi-wholesale operation.
• Limited liability protects Hajia’s personal assets from business debts, reducing risk compared to the unlimited liability of a sole proprietorship.
• A company structure enhances credibility with banks and investors, improving access to loans and investment.
• The business can continue to operate independently of Hajia’s personal involvement, ensuring longevity and scalability.
• Hajia can retain significant control as the majority shareholder and director, addressing her concerns about influence.