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2. Content
1. Concept of Sole trading concern
2. Characteristic of sole trading concern
3. Merits and demerits of sole trading concern
4. Registration and renewal of sole trading concern in Nepal
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3. Sole Trading Concern
Sole trading concern is the simplest, oldest and in some respect, the most
natural form of business organization in private sector. In this form a single
individual is solely responsible for providing the capital, for bearing the risk
and for overall management and control of the enterprise.
According to Professor Henry,” the individual proprietor is the form of
business organization at the head of which stands an individual as one who
is responsible, who directs its operations and who alone runs the risk of
failure.”
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4. Characterisitc of Sole Trading Concern
1. Single ownership
2. One man control, Management and decision making
3. No legal entity
4. Unlimited liability
5. No profit sharing
6. Small size
7. Undivided risk and responsibility
8. Maintain secrecy
9. No sharing of profit and loss
10. Limited area of operation
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5. Merit of Sole Trading Concern
1. Easy to establish and dissolve
2. Motivation to work
3. Adequate secracy
4. Quick decision
5. Sole ownership on profit
6. Close relation with customer
7. Flexibility in operation
8. Independent and effective management & control
9. Maintain social prestige
10. Economic development.
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6. Demerits of Sole Trading Concern
1. Limited capital
2. Unlimited liability
3. Uncertain existence
4. Limited public relation
5. Impractical decision
6. Difficult to obtain loan
7. Lack of specialization
8. Limited opportunity for staffs
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7. Registration of Sole Trading Concern in Nepal
Nepalese Government do not have any specific ac t that guiding to sole
trading concern. A sole trading concern should be registered in department
of industry or commerce according to private firm registration act. 2014 BS.
1. The sole trading concern of industrial nature should be register in
department of industry
2. And the concern of commercial nature should be registered in
department of commerce.
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8. Procedure of Registration
1. Submission of application form: obtain registration form from the
concern department, need to mention all prescribed detail, and submit all
required copy of required document along with application form.
2. Payment of registration fees: different ammount for diiferent
organization as per nature and size of company. Need to deposit money
in bank and submit voucher along with application form.
3. Obtain registration certificates: after concern department receive all
document and information they check their reliability and handover
registration certificate.
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9. Renewal of the Business
• Should renew the registration with in 35 days of the beginning of every
fiscal year.
• To renew trading concern, we need to submit renewal application form
which you can get from concern department/office.
• Need to submite voucher of renewal fee which we directly deposit to the
respective bank.
• Renewal fee depends on the nature, level and capital of the business.
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10. Impact of non registration and renewal
• Trading concern must register with in 6 months of establishment.
• If the concern run more than 6 months with out registration then
government can;
• Penalize the concern (fine are between 5 rupees- 50 rupees.
• Extra fine of 10 rupees or more will charge for not registering the company and also
will never registered in the same name.
There will be 35 rupees fine for non renewal till last date of ashwin and 150 after
termination of given time.
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