Brief notes on the features and suitability of Sole proprietorship business

Sole proprietorship is a form of business organization where sole trader owns the entire business and is personally responsible for the results of operation. He is regarded as the functional manager of all managerial functions of the enterprise.


Some of important characteristics of sole proprietorship are as follows:

  • Going it Alone - How to Manage as a Sole Proprietor |

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    It has single ownership

  • Capital contribution by sole trader from his own source
  • No separation of enterprise and the owner
  • Complete control by a single person
  • The liability of sole trader is unlimited
  • Does not necessitate any legal formalities for set up
  • It has limited area of activities.


A sole proprietorship form of business organization is suitable to the following types of business houses where:

  • The capital requirement is very small.
  • The goods are of artistic and personal requirements
  • There is transfer of personal services
  • Computer services
  • Business necessitating spirit of co-operation.
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