What are the important Features of Sole Trading Firm?

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(1) Simplicity:

The sole trading firm is the oldest and the simplest form of business organisation.

(2) No legal formalities:

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No legal formalities are required for the formation and closing of a sole trading firm.

(3) Single ownership business:

It is a one man show. It is owned and managed by a single person. The total required capital is invested by sole person.

(4) Self employment:

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The sole trader puts his own labour in conducting his business. If necessity arises, he may employ a few paid assistants or use the service of the members of his family.

(5) No sharing of profits and risks:

The sole trader enjoys all the profits of the enterprise and similarly bears all the losses or risks involved in the business.

(6) Exclusive managerial rights:

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The sole trader possesses the sole authority and right to manage the business.

(7) Ere from Government regulations:

The sole trading concern is not required to undergo any special legislation of legal formalities.

(8) Unlimited liability:

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The liability of a sole trader is unlimited. Hence, for business debts, not only his business assets but also his private assets become liable.

(9) Generally local business:

The activities of a sole trader are generally confined to a certain locality.

(10) Legal status:

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The legal status of a sole trader and that of the concern is the same. Hence, a sole trading concern solely depends upon the life of the sole trader.

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