Question

✌️✌️Hlw phirannds ✌️✌️
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Explain the merit & demerit of sole trading concern?
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Goo n copy from Google ​

Answer 1

Answer:

Explanation:

Advantages of sole trading include that:Advantages of sole trading include that:

you’re the boss

you keep all the profits

start-up costs are low

you have maximum privacy

establishing and operating your business is simple

it’s easy to change your legal structure later if circumstances change

you can easily wind up your business.

Disadvantages of sole trading include that:

you have unlimited liability for debts as there’s no legal distinction between private and business assets

your capacity to raise capital is limited

all the responsibility for making day-to-day business decisions is yours

retaining high-calibre employees can be difficult

it can be hard to take holidays

you’re taxed as a single person

the life of the business is limited

Hope it helps u☺

Answer 2

MERITS OF SOLE PROPRIETORSHIP FIRM

• Sole beneficiary of profits :- All the profit owned by the sole proprietorship firm belongs only to the proprietor himself.
• Sense of accomplishment :- There is a person satisfaction involved in working for one self. The success in business not only contributes to sell satisfaction but also in stills in the individual a sense of accomplishment and confidence.
• Independent control :- Total control of sole proprietorship firm lies in the hands of the proprietor only. He enjoys complete freedom of action. He has all the authority to take distance and run the business in his own way.

DEMERITS OF SOLE PROPRIETORSHIP FIRM

• Limited resources :- In sole proprietorship firm, finance is supplied by the proprietor himself from his wealth or from borrowings. There is a limit to the credit raising capacity of a single person. This reduces the scope for business growth. The funds are not sufficient for medium skill or large scale business.
• Limited scope for expansion :- Due to limitations of capital and management the sole proprietorship business cannot be expanded to a very large size. It is a suitable form for small scale operations only.
• Limited life of a business :- The survival and continuity of sole proprietorship form depends upon one person only. If the proprietor falls or becomes insolvent then the business may come to an end.