Sole proprietor / sole trader is a business unit
owned (and usually managed also) by single person. It is the
most popular and oldest form of business organization.
There
are many advantages for sole trader
business organization.
1)
It is very easy to setup and
control.
2) The owner can enforce the decisions easily.
3) The owner is entitled to take all the profit alone.
4) The sole trader will have a very close relationship with the workers
and customers.
Although
sole trader enjoys a number of advantages they do have to face certain disadvantages.
1)
Since obtaining finance is a problem the ability for expansion is limited.
2) Being a small business, they
are unable to take the benefits of large
scale economies. 3) Unlimited
liability could result in losing private property in case the business
is unable to pay back its debts.
4)
Since there is only one person as owner he/she is always tied up with the business. 5) In the case of death or sickness of the
owner the business will have less scope
of continuity.
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