Question

Write short note on merits of a proprietorship.

Answer 1

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.

Answer 2

The merits of the sole proprietorship are

1. Simplified formation and dissolution.

2. Ease of management and operation.

3. Tax exemption and governmental bias for the proprietor.

4. The lone beneficiary for profits.

5. Banks support credit rating.

6. Freedom of decision making and absolute control.

Apart from these, the sole proprietor has the benefit of running his business on his terms and conditions.