The business of a sole trader is called by different names e.g., Sole proprietorship, individual proprietorship, single entrepreneurship, etc. It is the oldest, the simplest and the most common form of business organisation.
Sole trader business is established, financed, owned and managed by a single person. The owner bears all the risks and receives the entire profits of his business.
Meaning and Definitions of Proprietorship according to various authors
Sole trader is a person who carries on business exclusively for himself. He alone establishes the business, arranges its finances, manages its affairs and bears all its risks. He acts both as the owner and manager of his business.
He alone is responsible for the profits and losses of his business. He may borrow funds and employ people to help him but the ultimate authority and responsibility lie in his hands. Sole trader business is thus a one-man show. Some popular definitions of sole trader are given below:
The individual proprietorship is the form of business organisation at the head of which stands an individual as one who is responsible, who directs its operations and who alone runs the risk of failure.
A sole proprietor is a person who carries on business exclusively by and for himself. He is not only the owner of the capital of the undertaking, but is usually the organizer and manager and takes all the profits or responsibility for losses.
Sole trader business is a type of business unit where one person is solely responsible for providing the capital, for bearing the risk of the enterprise and for the management of business.
Under the sole proprietorship form of ownership, a single individual organises and operates the business in his own name. He is not only responsible for its management but also for its risks.
Sole proprietorship is a form of business where the individual proprietorship is the supreme judge of all matters pertaining to his business.
Sole proprietorship is an informal type of business owned by one person.
Proprietorship is that form of business ownership which is owned and control by a single individual he receives all the profits and risks all of his property in the success or failure of the enterprise.
Thus, a sole-trader is an individual who owns and manages a business, bears all the risks and is entitled to all the gains there from.