SOLE PROPRIETORSHIP commerce - - . . PM It is also known as individual entrepreneurship. To raise the required capital the individual may depend mostly on his own savings, or else, he may borrow part or whole from his friends or relatives or financial institutions.
The business may be started either in a portion of the proprietor’s own house or in a rented premises. There are no legal formalities to be gone through except those required for a particular type of business. For example, if one wants to start a restaurant has to obtain a license from the Health Department of the Municipal Corporation. .
Characteristics The following are the characteristics of a Sole Trader. i. Ownership by one man This is owned by single person. The sole trader contributes the required capital.
He is not only the owner of the business but also manager of the entire affairs. ii. Freedom of work and Quick Decisions Since the individual is himself as a owner, he need not consult anybody else. Hence he can take quick decisions.
“Sole trader is a type of business unit where a person is solely responsible for providing the capital, for bearing the risk of the enterprise and for the management of business” - J.L.Hansen “Sole proprietorship is that form of business organisation which is owned and controlled by a single individual. He receives all the profits and risks all of his property in the success or failure of the enterprise”. - Wheeler . Definition of Sole Trader Sole Trading Concern Partnership Firms Joint Hindu Family Business Public Undertakings Joint stock Companies Public Utilities Government Private Cooperative