What do you understand by Sole Proprietorship? Outline its features.

Explanation

Sole proprietorship refers to a form of business organization which is owned, managed and
controlled by an individual who is the incipient of all profits and bearer of all risks. The word “sole”
implies “only” and “proprietor” refers to “owner”. Hence, a sole proprietor is the only owner of a
business. This form of business is particularly common in small scale business and areas of
personalized services.

Features of Sole Proprietorship:

(i) Formation and Closure :Very few legal formalities are required to start a sole proprietary business,
except in the fields where a license is required. Closure of the business can also be done easily.

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