Features of sole trading concern

Features of sole trading concern

1)single ownership business

  The ownership of sole trading remains only with a single person called, " sole trader". He owns all business assets because business is established out of his personal property . the sole trading concern is often known as "one man show".

2)unification of ownership and management

The sole trader is owner as will as manager of his business organization. He has full power and authority regarding management of business organization. Thus, there is direct relationship between ownership and management.

3) local area business

Due to limited capital and limited business skills, the sole trader conduct the business on small scale. Sole trading concern is suitable when market is local in character and simple in nature.

4)business secrecy

The sole trader can maintain complete business secrecy in his organization because he need not publish accounts and other records. Hence, his competitor does not get the business secrets.

5) complete control over business

All decisions which are important to business are taken by sole traders. If there are problems then he can take necessary steps to solve it. Hence, the sole trader enjoy complete control over his business.

6) close contacts

Due to small size of business the sole trader have close contact with customers and employees. Contact with customers enables the sole trader to know the tastes and requirement. Whereas, contact with employees results into better relations. Thus it results into increase in profit. 

7) no sharing of profit and losses

The sole trader bears all resk and losses of business. Naturally, he is untitled to earn the profit of business and to enjoy the profits of business. Thus, being a single owner, there is no sharing of profit and losses.

8) flexibility in operation

 A sole trader enjoys complete flexibility in business operation. So, he can expand the business, can change the line of business and can also close down the business if required. 

9)minimum government regulation

There are minimum government regulations on the activities of a sole trader. Proprietary concerns are not governed by any separate law. These organization.

10) unlimited liability

 The liability of sole trader is unlimited. There is no distraction between business property and personal property. In case, the business property is not sufficient to pay the debts of the business then the personal property is used to pay the debts.