merits of sole trading concern are
Answers
Answer:
Some of the notable advantages or merits of sole trading concern can be described as follows:
1. Simplicity
Sole trading concern is easy to start, operate and close. The owner is the business. There are few legal formalities. The costs of establishing the business are low.
2. Quick decisions
Sole trading concern has the advantage of quick decision. The owner is the manager and he has freedom to make decisions. There is no need to consult others. Quick decision helps quick actions.
3. Control
Sole trading concern has advantage of full control be the owner. He provides personal supervision. He has total authority and responsibility for business. Effective control is possible over the functioning of business.
4. Secrecy
The owner can keep secrecy about sales and financial performance. He is not required to publish accounts. Auditing is not compulsory. Secrecy helps to face competition. So, sole trading concern has advantage of secrecy. So, high level of privacy is another merit of sole trading concern.
Explanation:
. Easy to Form:
Proprietary concerns can be formed easily and quickly. Very few legal formalities need to be fulfilled. There is no need to go for any registration or enter into an agreement with someone. One can form it and dissolve it quickly.
Effort-Reward Relationship:
Proprietary ventures give a kick in the belly. You can burn the candle of energies and make money. You take the risk and get rewarded. The effort-reward relationship often excites people to chase creative ideas and turn them into successful ventures.
Full Control:
The owner has full control over everything. He is answerable to no one else. He decides everything in the best interests of the business. Right or wrong, he takes charge of the situation.