Sole proprietorship – merits and demerits

Sole proprietorship – merits and demerits

Sole proprietorship – a business in which a person responsible for managing all the business activity, responsible for providing fund and bearing all the risk. It is also called single man business or one person business. In these types of business a single person is responsible for all the matters related with business.

merits and demerits

Here, we mention some merits or demerits like –

Merits - :

ü  Easy formation

ü  Highly motivated

ü  High level of business secrets

ü  Fast decision making

ü  Close relationship with different party

ü  High level of economic attention

ü  Flexible – decision & expansion

ü  Easy to start

Demerits - :

 ü  Unlimited risk

ü  One person to manage but uncertainty of life

ü  Did not have a wide range of managerial ability

ü  Low level of influence in market

ü  Every person have a limited capital to invest