Business Studies XI Content
Characteristics of sole trading concern
Some characteristics of sole trading concern:
1. Single ownership:
A sole proprietorship is wholly owned by one individual. The individual supplies the total capital from which his own wealth or from borrowed funds.
2. One man control:
The proprietor alone takes all the decisions pertaining to the business. He is not required to consult anybody. Ownership and management are vested in a person.
3. No legal entity:
A sole proprietorship has no legal entity separate from its owner. The law makes no distinction between the proprietor and the business. The assets and liabilities of the business and its proprietor are not different.
4. Unlimited liability:
Proprietor is liable for all the debts of the business. In case the assets are insufficient to meet the debts, the personal property of the proprietor can be attached.
5. No profit sharing:
The proprietor is all alone entitled for all the profits and the losses of the business. He bears the complete risk and there is nobody to share the risks, workload or any profit or losses.
6. Small size:
The scale of operation carried out by sole proprietor is generally small.