Discuss the features of sole proprietorship.write merit and de merit of sole proprietorship?
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Answer:
Advantages and Disadvantages of Sole Proprietorship
A sole proprietor business is established, owned, financed and controlled by a single person who is known as sole trader or sole proprietor.
Such a business run by sole trader or sole proprietor is known as sole trade or sole proprietorship.
Some of the advantages of sole proprietorship are:-
1. Easy to Form 2. Effort-Reward Relationship 3. Full Control 4. Quick Decisions 5. Economical and Efficient Operations
6. Personal Touch. 7. Keep the Business Simple, Dynamic and Flexible 8. Society Gains as a Whole 9. Sole Beneficiary of Profits 10. Benefits of Small-Scale Operations
11. Retaining Secrecy 12. Social Desirability 13. Tax Advantage. 14. Minimum Government Control 15. Direct Motivation
16. Catering for Individual Tastes 17. Credit Standing 18. Independent Way of Life 19. Generation of Social Virtues 20. Diffusion of Business Ownership.
Some of the disadvantages of sole proprietorship are:-
1. Small Size 2. Limited Shelf Life 3. Lacks Professional Skills and Talent 4. See the Big Picture 5. Unlimited Liability
6. Growth Prospects. 7. Limitation of Management Skills 8. Limitation of Capital 8. Weak Bargaining Position 9. Limited Scope for Expansion 10. Risk of Wrong Decisions
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