Sole proprietorship is a type of business organization in which an individual own the business, operates all the activities related to the business, introduce his own capital, used in own skill and intelligence to run the business and responsible all risks and profit of the business.
Characteristics of Sole Proprietorship
Ownership
The ownership of the business unit is by individual.
Finance
Finance is essential element to run the business which is provided by the owner. Sometime he borrowed by friends and financial institution when he required.
Management
In sole proprietorship the owner is the active manager of his business, he delegate his power to his employee if the business is large. However, the overall control of the business in his hand.
No Legal Condition
No legal formalities to setup the sole proprietorship business. This type of business starts any time and any where without legal formalities by individual.
Power of dissolving
Sole proprietor dissolves his business taking without any advice from anyone. He has power to end and start the business when he likes because he is the king of his business.
Risk
Sole proprietor run the business for his own interest so he is alone responsible of all risk related to business.
Unlimited Liability
Liability of sole proprietor is unlimited. In the situation of bankruptcy he will bear lose in form of personal wealth.
Immediate decision
In sole proprietorship individual can take immediate action to hold the situation.
0 comments:
Post a Comment