Advantage of a sole proprietorship over other business forms - Sepmat

Advantage of a sole proprietorship over other business forms

Advantages of sole proprietorship


 Advantages of sole proprietorship. Sole trader or sole proprietorship is the oldest and popular form In the history of the business. It is only sole proprietorship which is common in rural and urban areas. And it one of the simplest and popular forms of business organization.

Let’s find out the advantages of sole proprietorship business


Advantages of sole proprietorship

It can be formed very easily and quickly which is the outstanding advantage of sole proprietor. Only a licence has to be taken from the local authority and no other legal complication require.

Cost of production

Advantages of sole proprietorship

In sole proprietorship, there are very less managerial and administrative expenses as compared to the form of business organization. As a result, the cost of production reduced. Due to less unit cost of demand and profit also subsequently increased the benefiting the unit. More advantages


Advantages of sole proprietorship

The whole profit of the business belongs to the proprietor itself. The desire to earn more stimulates him to work hard and devotes his entire soul and heart to make his business unit a grand success. The reward is the best motivation for hard work.

Advantage in tax

Advantages of sole proprietorship

A  sole proprietor gain advantage in paying tax.  It is required to pay tax as an individual and not as a business unit in sole proprietor. Thus the tax liability of a sole proprietor is very less as compared to a company. And if the business unit of a sole trader comes under jurisdiction of SSI, cottage industry or KVIC, than the entire amount of profit is free from tax. A company has to pay tax at a higher rate as compared to a sole proprietorship. Job and business

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Advantages of sole proprietorship

The success of an enterprise depends upon that the secrets of the business should be safe. Secrecy is not practicable in other forms of organization. Secrecy can be maintained in the sole proprietorship. Moreover, a sole proprietor is not required to disclose his profit or financial position to anyone. So all the secrets kept in the business. Advantages of sole proprietorship


A sole proprietor can take full advantage of entrepreneurial opportunities. He can change the course or line of the business at any time as may be required by a particular situation. A sole trading concern is thus more flexible as compared to other forms of organisation and is best suited to the enterprise where demand. Thus there is a great deal of flexibility fluctuates frequently in plans, policy

Easy to dissolve

The closing down of the enterprise depends entirely upon the decision of the proprietor to dissolve the unit. No legal formalities are involved in the dissolution of the business. The proprietor is not required to justify his decision before any authority. He can also raise money from debtors after the dissolution of the enterprise.

Here is the list of the top Advantages of sole proprietorship.

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