Explain the merits and demarits on the sole proprietorship?

Answer 1

Answer: The main advantages of sole proprietorship are:-

1. Easy to Start and Dissolve : A sole proprietorship can be set up easily and quickly.No legal formalities and expenditure are involved in th establishment of a propriertorship.

2. Motivation to Work : The sole proprietor alone is entitled to receive all the profits of businessand he alone has to bear all losses. There is a direct relationship between effort and reward. Therefore, there is an incentive to work hard.

3. Quick Decisions : The sole proprietor is completely free to take decisionsand to implement them. He need not consult others or seek their approval.

4. Independent Control : The sole proprietor is the is the supreme judge of all metters pertaining to his business. He enjoys complete freedom of action.

5. Secrecy Of Affairs : The sole trader is not required to publish his accounts. He is not expected to share his secrets with others.

6. Personal Touch : The sole proprietor can maintain personal contacts with his costumers and employees.

Disadvantages answer will be posted later...

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