features of sole trade – The main features of sole trade are as under:
1.Single Proporietorship or Sole Ownership
Single proprietorship or sole proprietorship is the most important feature of sole trade form of business organisation. Sole trade is one man business. It is owned by a single person. In the words of Gerstenberg,” He own all and risks all.”
2. Individual Initiative
Sole business is started by initiative of a single man. He do all activities of business.
3. Unlimited Liability
In the sole trade business liability of owner is unlimited. The sole trade is responsible for all losses and risks of business. Sole trader’s liability is not limited only the investment of sole trader.
4. Sole Management and Control
In the sole trade, proprietor, is sole managing and controlling authority. The sole trader manages the whole business himself. He prepares different plans and makes efforts for the success of business. He is the supreme king of the film.
5. Individual Capital
Required capital is invested by the sole trader himself. He can take loan from his friends, relatives and banks etc.
6. Business and Owner are One
In the sole trade business sole trade and owner are one. There is no difference between the business and the owner. In the sole trade there is no separate entity of business from its owner. The business and owner exist together.
7. One Man’s Profits or Losses
In sole trade, profit is taken by one person and losses are also suffered by the same person.
8. Free from Legal Formalities
No legal formality is required for the formation of sole trade business. According to J.L Lundy, “Becoming a sole trade is as simple as buying newspapers and selling them on a street.” In the partnership business the Partnership Act, 1932 and in the companies the Companies Act, 1956 are applied. Sole trade should not be inlegal.
What do you understand by business capability and business success?
9. Voluntary Start and Windingup
The sole trader has discretionery power to start a business. Sole trader can wind-up the business at any time. Its start and winding up is not subject to any Government rules and regulations.
10. Small Sized
Normally, sole trade business is small sized business. It runs on small scale. It has limited area of operations. It has limited funds.
11. Freedom of Occupation
The sole trader is free to start any business. He can take decisions freely. He can take decision according to his choice. He can expand or curtail his business activities in accordance with the changing conditions of business.
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