stions
C.
Explain the characteristics of Sole trading
business.
2. What are the advantages of Sole trading
business?
3. What are the disadvantages of Sole
trading businesses
Answers
Answer:
Sole proprietorship has certain distinct characteristics. They may be explained below:
(1) Single Ownership : One person own the whole business. The business is exclusively in the hands of that person. He provides the entire capital either from his private resources or by borrowings.
(2) One-Man Management and Control : A sole trader himself organizes, manages and controls the business according to his desire and capability. He may appoint employees to help him in business activities. However, the sole responsibility of management lies on him.
(3) Unlimited Liability : This types of business organization has the drawback of unlimited liability. Hence, creditors are entitled to have claim even on his private property.
(4) No Sharing of Profit and Loss : The proprietor has the sole right on the profit of the business. Similarly if there is loss he has to suffer alone. Hence, he puts his efforts