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Sole Proprietorship

       Sole Proprietorship is a popular form of business organization and it is the most suitable form of organization for small businesses. It is one of the oldest, simplest, and common form of business organization. Sole proprietorship form of business is established, financed, owned, and managed by a single person who is known as, Sole Trader or Sole Proprietor . The sole trader bears all the risks and he alone is responsible for all the profit 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. Therefore, Sole trader business is a one-man show. Definition of Sole Proprietorship by L.H. Haney        The individual proprietorship is the form of business organization 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. Definition by B.O. Wheeler       The sole proprietorship is that form of business ownership whic
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Classification of Human Activities

Unit 1 - Nature and Purpose of Business Chapter 1- Classification of human activities        Points covered in this chapter:- Meaning and characterstics of Human Activities Classification of human activities - Economic and Non-Economic Activities Distinction between Economic and Non- Economic Activities Types of Economic activities Distinction between Business, Profession and Employment. Click here to download the Chapter Notes;   Download
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A sole trader whose business is expanding feels the need for additional capital and managerial assisstance. Should he employ an assitant or take a partner?

            A sole trader may want to expand his business at some point of time. At that time he may face the problem of  shortage of capital and managerial skills.  Two alternatives are available to him for solving this problem.  1. To Employ a paid assistant  2. To admit one or more partners     Employment of Paid Assistant    When the sole trader employs a paid assistant, he has the following advantages and disadvantages: Advantages a) Division of work: An assistant can be appointed whose expertise can be used for the benefit of the business. The sole trader can delegate some of his work to the assistant and can devote his time and attention to crucial matters of business. b) No share in profits: The assistant is paid a fixed salary. The assistant is not given a share in profits. c) Complete control: The assistant has no right to interfere in decision making. So, the sole trader retains full control over the business. d) Secrecy: The sole trader is not expected to share the secr
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