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 The most straight forward and simple
type of business organization is
individual or sole proprietorship. It is
the first stage of business
organization. The sale trader is an
individual who invest his
capital,employees,necessary labour
,directs the activities of the business
and bears the risk of business.
 “It is a type of business unit where
one person is solely responsible for
providing the capital for bearing the
risk of enterprise and for the
management of the business.”

 Common identity
 Capital
 Unlimited liability
 One man control
 Profit and loss
 Generally local
 Close contact with
customer and
 Single ownership
Common Identity
 A sole tradership business has no
different legal entity independent of
the owner.
 The owner & the business concern
are treated as one and the same.
 It does not need registration.
 The law does not contemplate
special status to the business distinct
from it’s proportion.
Capital is emplyed by the
owner himself/herself from
his/her personal resources.
We may also borrow money
from his friend and relative to
fulfill the need of business is
Unlimited Liablities
 The proprietor’s liability for the debts
of the business is unlimited .
 The dues of the creditors can be
recovered even from the personal
property of the porprietor.
 If the same cannot be recovered
from the business asset.
One Man Control
 It is one man show and he is his own
 The sole trader makes all the
decisions he procures materials,
employees labour personally and
directs manager and control the
activities of the firm or business.
 He has not to consult anybody for
any decision.
Profit and Loss
If such business result into
profit it wholly belongs to
the the proprietor.
Similarly all the business
losses and risk are to be
borne by him only.
Generally Local Business
 The small scale business are mostly
situated in local areas.
 The main reason behind that there is
only one person in the business and
he can not be every where at one
 Thus, small scale business or sole
trader business are always in local
Close Contact with
Customers & Employees
Due to small size of business
it is possible for the sole
trader to have close contact
with his employees and
Contacts with employees
result in better relation &
avoidance of frictions.
Single Ownership
A sole trading concern is a
one man show. It is owned by
an individual.
He owns all the property and
assets of the firm, he provide
required capital.
Guided By
Mrs. Nazia Ansari
Reference :
Paresh Shah
F.Y. B.B.A.