Characteristics of Sole Trader

Characteristics of Sole Trader

The following are the characteristics of a Sole Trader.

Ownership by one man

This is owned by single person. The sole trader contributes the required capital. He is not only the owner of the business but also manager of the entire affairs.

Freedom of work and Quick Decisions

Since the individual is himself as a owner, he need not consult anybody else. Hence he can take quick decisions.

Unlimited Liability

When his business assets are not sufficient to pay off the business debts he has to pay from his personal property.

Enjoying Entire Profit

He strives tirelessly for the improvement and expansion of his business and enjoys all the benefits of his hard work.

Absence of Government Regulation

A sole proprietor concern is free from Government regulations. No legal formalities are to be observed in its formation, management or in its closure.

No Separate Entity

The sole trading concern  comes  to  an  end with death, disability, insanity and insolvency of the individual.

Maintenance of Secrecy

Since he/she manages all the affairs of the business, the secrecy can be maintained easily.