Sole trading concern is the oldest and simplest form of commercial organization having one owner. The sole trader must, however, be a person competent to enter into a contract. It is such type of business in which a person himself is the owner of all the assets of the company and it is totally opposite of corporation and partnership, and such a person who does such kind of business is called as sole proprietorship. As a sole trader you will be legally responsible for all aspects of the business. There is no guarantee that sole trading concern will be continued, because it may close down in the case of loss or the death of the proprietor. He is also solely responsible for the debt and risk of the firm. A sole proprietorship is wholly owned by one individual. Sole trader business advantages disadvantages suitability. Sole trading concern grade 11 business studies long questions.
In this way the trading and profit and loss account covers an accounting period of a financial year which can end at any date it doesnt have to be the calendar year, and the balance sheet shows the state of the business at the end of the accounting period. Incorporating a company on the isle of man is relatively straightforward and can be done a few ways. Sole trading concern is popular not only in india, but also in foreign countries also. The history about sole proprietorship law company business. Easy to commence and dissolve a sole trading concern is owned, managed, controlled and invested by a single person. A soletrader is a person who carries on business exclusively by and for himself, he is not only the owner of the capital of the undertaking, but is usually to. The sole trader may utilize his personal capital, retained profits, sale. The ability of a sole trader is relatively limited when compared to a private or public company.
What are some examples of the sole trader of a business. A sole trader is also known as a sole proprietorship. One mans business is best in the world, if that one man. The sole trading firm is the oldest and the simplest form of business organisation. Any business which has only one owner is sole trading concern. Pdf on aug 1, 2015, leonard mbira and others published key success factors for sole trader retailer growth in a multicurrency zimbabwe. It may also be that there may be no heir or there may be legal conflicts. A sole trader typically makes all the choices regarding starting and running your business.
Sole trading concern free download as powerpoint presentation. According to professor henry, the individual proprietor is the form of business organization at the head of which stands an individual as one who is responsible, who directs its operations and who alone runs the risk of failure. Explains the advantages and disadvantages of setting up your business as a sole trader. The individual supplies the total capital from which his own wealth or from borrowed funds. The sole trader has multiple options for extending his finances and preventing dilution of ownership while continuing to fulfil his financial needs. Audit of sole trading concern guidelines advantages to. Sole trading concern has liability which is not limited to the property of a business.
An introduction to sole traders business comparison. A sole proprietorship, also known as the sole trader, individual entrepreneurship or proprietorship, is a type of enterprise that is owned and run by one person and in which there is no legal distinction between the owner and the business entity. A soletrader is a person who carries on business exclusively by and for himself,he is not only the owner of the capital of the undertaking, but is usually to organise and manage and takes all the profits or responsibility for losses. A sole proprietorship, also known as the sole trader, individual entrepreneurship or. If a sole trader uses a business name of their choosing, there are restrictions on what names may be used, and requirements as to what information the sole trader must be displayed at its place of business and in correspondence. Describe, in brief, the procedures of registration of sole trading concern in nepal.
In these form of business, owner and manager are same. The liabilities of sole trading concern are unlimited. A sole trader does not necessarily work aloneit is possible for the sole trader to employ. A sole trader business is also referred to as a sole proprietorship. Pdf key success factors for sole trader retailer growth in a. A sole trader is the most straightforward kind of business structure and is comparatively cheap and straightforward to line up. As the name implies, it is a business owned and operated by a single person. Oct 07, 2015 sole proprietorship refers to a form of business organization which is owned, managed and controlled by an individual who is the recipient of all profits and bearer of all risks. Thus, the business organisation in which a single person owns, manages and controls all the activities of the business is known as sole proprietorship form of business organisation.
Characteristics of sole trading concern businessmarketing. This form of business is one of the oldest form of business organization. Definition of sole trader sole trader is a business that is owned by one person, but however it can be operated by more than one person. So a trading concern is an organization where all business activities are controlled and managed by one man. Characteristics of sole trading concern reference notes. Auditing audit of sole proprietary concern tutorialspoint. Auditing audit of sole proprietary concern there is no obligation for a sole proprietor under any law to get the accounts except in case where the turnover of a proprietary business in any financial year. Mar 08, 2010 in sole trading concern an individual makes all the investments, bears all risks, takes all profits, manages and controls the business himself. Sole trading concern grade 11 business studies short. A sole trading concern is individually owned business which has several features or characteristics such as oneman management, no legal entity, unlimited liability, small size and limit operation etc. But nowadays it has become customary to have the accounts of sole trading concerns audited, especially those traders whose area of operations and the volume of business are very large. Chapter 5 preparation of final accounts with adjustments.
However, its easy to set up and is most favoured by one man bands who offer household services. To set up as a sole trader, you need to tell hmrc that you pay tax through self assessment. Usually not necessarily always following businesses are run by a sole trader 1. Sole trading concern is owned, managed and controlled by a single person. A sole proprietorship is a business operated by a single individual. Bad health or death of owner leads to end of business. It is also suitable for small scale local business operations requiring small capital. A sole trader business has many advantages and disadvantages. There is no stability and continuity in sole trading concern. The following are some of the features of a sole trading concern.
Sole trade is the oldest and most commonly used form of business organisation. It is the competence of the sole trader that determines the future of the business. Presentation of data and information for sole trading concern. Sole trading concern sole proprietorship business scribd. In spite of all the limitations, a sole trading concern is a popular form of organization in all parts of the world. Concept and meaning of sole trading concern businessmarketing. His powers are unlimited and his decisions are final. Youll generally make all the decisions about starting and running your business and you can employ people. Auditing the accounts of sole trading concerns is not mandatory and there is no legal compulsion. If you own a business with a partner or if your business is set up as a corporation, it is not a sole trader business. Discover everything scribd has to offer, including books and audiobooks from major publishers. Sole trading concern is the oldest form of commercial organisation. Sole trading concern economics xii notes neb notes. Thus, we can say that it has its own place in the field of business even today.
Audit of sole trading concerns guidelines to auditors. In this business, it has one sole owner is also known as manager and controller. It means only one person or an individual becomes the owner of the business. The history about sole proprietorship law company business partnership essay. There may be no one after him who may keep on the business. Some characteristics of sole trading concern includes single ownership. These tradesmen are selfemployed as the sole owner of the business concerne. Some of the main characteristics of sole trading concern can be describes as follows. It is suitable for personal services and perishable products. Features easy formation and closure unlimited liability sole risk bearer and profit recipient no separate entity absolute control lack of business continuity.
Sole trading concern is the simplest, oldest and in some respect, the most natural form of business organization in private sector. A sole proprietorship can have multiple people operating the business, but it must have one sole owner. A sole trader is the simplest form of business structure and is relatively easy and inexpensive to set up. You might want to use the printable pdf table available for download below. Sole ownership is a sort of enterprise that is owned and run by one person and within which theres no legal distinction between the owner and, therefore, the business entity. In most of the cases, the business ends with the death of sole. Sole means one person, so a sole trading concern is an organization where all the business activities are controlled and managed by one man. The business which is started, invested and managed by a single person is called sole trading concern.
Along with the progress of business its form has also been changing. Therefore, the important points in the concept of sole trading concern are. A sole trader can trade using their own name, or under a business name of their choosing. He is, in fact, the sole organiser, manager, controller and master of his business. The person who starts run sole trading is called sole trader or sole proprietor. What are the important features of sole trading firm. A sole proprietorship, also known as the sole trader or simply a proprietorship, is a type of business entity that is owned and run by one natural person and in which there is no legal distinction between the owner and the business advantages of sole trading concern. Chapter 18 audit of soleproprietorship and partnership firm chapter outline 18. Consider operating as a sole trader if your business is small and capital investment is minimal. But due to its simplicity, quick formation and easiness, this form is the most popular and in practice in the world. Manager and controller are the third features of a sole trader and it means a sole proprietorship is a form of business that has an individual owner who is accountable for making and managing the decisions for the sole business company. Jan 19, 2019 a sole trader is also known as a sole proprietorship.
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