14 Best Sole Proprietorship Advantages – All Time Beneficial

Sole Proprietorship is starting your own business, it may be a shop, freelancing office, any service you provide, usually, these are small scales businesses. Joint Stock Company, Partnership, Sole Proprietorship, Co-Ownership are various types of business.

In this reading, we shall try to empower sole traders by highlighting top Sole Proprietorship Advantages. It entirely doesn’t mean sole proprietorship disadvantages should be neglected. They are too fact-based.

Sole Proprietorship Advantages
• Form Easily
• High Personal Interest
• Grap Full Profit
• Business Secrecy
• Low Cost operations
• Complete Control
• Dissolve Easily
• Social Benefits
• More Credit
• Flexiblities
• Direcct Interactions
• Easily Transfer Ownership
• Indepence
Sole Proprietorship Disadvantages
• Lack of Capital
• Unlimited Liability
• Lack of Skills
• Continued Existinace Problems
• Fewer Growth Chances
• Complete Loss
• Management Issues
• Unable to move in Large Scale
• Limited Public Confidence
• More Frauds
• Psychological Complexes
• Inspection Prblems

Advantages of Sole Proprietorship

sole proprietorship advantages

Easy Formation

An individual enterprise is easy to form and simple to run. No legal formalities, like registration, are required to set it up, and no reports are submitted to the govt. about the function of the business. But there is a complicated and long process for the formation joint of stock company.

Personal Interest

As there is a personal element in this class of business organization, businessman devotes his full time and energy. He tries to know the habits, fashions, and tastes of his customers and he changes his policy according to circumstances. Thus he may easily establish his goodwill in the market due to personal care. But partners and shareholders have minor personal interest.

Entire Profit

There is no other form of business in the world except this where one man enjoys 100% Profit of business. The key Difference Between Sole Proprietorship and Partnership and joint stock company, the profit is distributed among the number of persons.


In my view, one from the biggest Sole Proprietorship Advantage is secrecy is the important factor which may be maintained by the sole proprietor. There are three types of secrecy i.e. trade agreement, the technique of production and profit.

Low Cost of Starting and Operation

The sole proprietor has to incur minor preliminary expenses for the commencement of this type of business. There are no legal charges, registration expenses, attorney and advisory fee. As generally the business is managed by one person, he has not to pay operational expenses. But Joint Stock Company is a costly organization.

Entire Control

The most common reason and all-time favorite advantage of sole proprietorship are that a sole trader has entire control over all his assets and other activities. When his business increases in size, some authority is delegated to paid person, but ultimately the control and supervision remain in the hands of one person. He can do whatever he likes. Other persons cannot interfere in his mater. But this is not possible in another form of business organization.

Easy Dissolution

This type of business may easily be dissolved at any time. There is no complicated formality for the dissolution of a sole proprietorship, as in the case of Joint Stock Company where long legal procedures are required for the winding up of its business.

Social Benefits

This form of business may be commenced with small capital and minor managerial abilities. So it provides the opportunity for livelihood to jobless persons. On the other hand, sole trader renders valuable services for the public. He provides daily necessities of life near to their home.

Credit Facilities

Under the sole tradership the liability of the owners in unlimited. It means that his private assets are also liable to pay the business obligations. This factor enhances the credit facilities from the internal and external sources.


As mostly the activities are supervised and controlled by the sole proprietor himself, therefore, it tries to achieve the economy in the various fields & phases of business cycle. Thus his sources do not waste in an unproductive sector.

Direct Relationship

Sole trader possesses a socially connected life and this is an important factor for the expansion of the business. On one side he manages staff, assign duties and maintains a direct relationship with the workers to achieve the best results of his venture.

On the other side, he develops cordial relations with customers and the general public in order to create the demand for his product. He thus establishes his sound reputation inside and outside the business.

Simplicity in Transferability

The kind of business may easily be transferred to another person. No legal permission is required to close down or suspend. At any time sole trader may recommence, transfer or disconnect without any restriction. But there is a long complicated procedure to transfer the business of Joint Stock Company.

Independent Sources of Livelihood

Sole proprietorship is an independent form of organization for the businessman in the world. There is no interference from any quarter. He is the supreme authority who enjoys self-determination, the excitement of social relation and psychological satisfaction.

Due to the above-mentioned reasons &  sole proprietorship advantages, the system of single ownership is liked and preferred to other forms of business houses and therefore, this type is found till today in spite of being an old system.

One man control is to be regarded best in the world if the size of the sole proprietor’s business remains restricted to a certain extent and does not tend to increase in near or far future.

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