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Sole proprietorship is a form of business organization in which an individual introduces his own capital, uses his own skill and intelligence in the management of the business. Explain the characteristics of a sole trader? |
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Answer» Business owned and controlled by a single person is known as sole trading business. The following are the characteristics of a sole trader: 1. Ownership by one man: This is owned by single person. The sole trader contributes the required capital. 2. Freedom of work and Quick decisions: The sole trader is the owner, so he need not consult with others. Hence he can take quick decision. 3. Unlimited liability: When his business assets are not sufficient to pay off the business debts he has to pay from his personal property. 4. Enjoying Entire Profit: All the benefits earned by the sole trader is enjoyed by him alone. 5. Absence of Government Regulation: A sole trading concern is free from Government regulations. No legal formalities are to be observed in its formation and management. 6. Maintenance of Secrecy: Since the trader manages all the affairs of the business, the secrecy can be maintained easily. |
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