Brief notes on the Areas of application of sole proprietorship


A sole trading concern is a form of business organization, which is owned and managed by a single person for his exclusive benefit. It has no legal identity separate from that of its owners. The formation of sole proprietorship is easy and involves less legal formalities. Any person who is competent can set up his own business.

A sole proprietorship is generally suitable for a business

a) Where capital needed is relatively less.


b) Where quick decision can be taken .

c) Where the risk involved is considerably less.

d) Where limited managerial skill is witnessed.

e) Where proximity with customers and workers is essential.


f) Where business can be controlled and managed by one person.

Thus, the types of sole proprietorship are retailers, grocery

stores, hotels, confectioners, painting houses and professional firms such as photographers, tax consultants etc.

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