Sole Proprietership Economics Best Notes Sole Proprietership Economics Best Notes Sole Proprietership Economics Best Notes

2. A business owned , managed & controlled
by a single individual is known as a sole
proprietorship. It is also known as sole
trader .

3. According to J.L. Hansen “ Sole trader is a
type of business unit where one person is
solely responsible for providing the capital
, for bearing the risk of the organisation &
for the management of business .”

4. 1. Ownership
2. Management and Control
3. Finance
4. Risk
5. Unlimited Liability
6. Legal Status
7. Relationship with customer
8. No Legal formalities
9. Ease of dissolution

5. 1. Ease of formation
2. Sole Authority
3. Sole claim on profit
4. Flexible and inexpensive management
5. Credit standing
6. Minimum Legal restrictions
7. Legal Status
8. Secrecy

6. 9. Possible tax advantage
10. Direct relationship with customers
11. Power to start & close the business
12. Benefit of inherited goodwill
13.Reducing concentration of wealth
14. Self employment
15. Development of personal qualities
16.Social benefits

7. 1. Burden of unlimited liability
2. Difficulties of expansion
3. Limited Managerial ability
4. Lack of continuity
5.Operational disadvantages
6. Loss in absence
7. Absence of specialization
8. Weak bargaining position
9. Unsuitable for a developing business

8. Any
Question?