Reading: What is a Sole Proprietorship
Business Management for Every Enterprise
Unit 5
What is a Sole Proprietorship
Sole Proprietorship
An unincorporated business owned by one person who often the owner also acts as manager. This form of business organization is common in small retail stores, service businesses, and professional practices in law, accounting, and medicine.
A sole proprietorship is a very common form of business in a free market economy.
Feature of Sole Proprietorship
Individual ownership
Sole management
Unlimited liability
Freedom in selection of business
Secrecy
No separate legal entity of the business
Undivided risk
Suitable for some special forms of business
Merits of Sole Proprietorship
Quick decision
Benefit of secrecy
Direct motivation
Personal control
Easy information
Limitations of Sole Proprietorship
Limited source of capital
Unstable existence
Unlimited liability
Unbalanced management