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The Advantages of sole trading concerns

Updated on May 3, 2015

Owner of the business


The marketing


Blouses in different

He enjoys all the profits and fully responsible for losses

Sole concerns are run by a single person. He is the owner, and the manager. He enjoys all the profits and fully responsible for losses. He is the person solely invested capital to run the business.

Features – It is one of the oldest and simplest forms of business organization. It is owned and managed by a single person. It is easy to start a business. These concerns are run by the sole traders for profits. The sole trader uses his own skill and responsible for all the losses. He takes the help of his family members or appointed some workers to help him in business. Generally they are small size. But nowadays they run on big scales also.

Advantages of a sole trading concerns – No legal formalities are required to commence the business. It can be started by own capital. No difficulties arise in day to day running of the business. The owner enjoys all the profits and bears all the losses. They directly come into contact with the consumers. They render some social services also. They provide employment to some people.They help in distribution of wealth. They understand the like and dislikes of the customers and supply goods accordingly they pay rates, taxes and duties to the government. They are in a position to take quick decisions regarding business. They maintain business secrets.

Disadvantages of sole trading concerns – Sole trading concerns are not free from some disadvantages. They are Capital is limited and they cannot expand the business. Since it is run by a single person the managerial ability is limited, (two heads are always better to take decisions) all the losses are to be borne by a single person. The life of the sole trading concerns may be short, with the death or insolvency of the sole trader, the trading concern will be closed.


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