A sole Proprietorship is starting your own business, it may be a shop, freelancing office, or any service you provide, usually, these are small scales businesses. Joint Stock Companies, Partnership, Sole Proprietorships, and 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 | Sole Proprietorship Disadvantages |
---|---|
Form Easily | Lack of Capital |
High Personal Interest | Unlimited Liability |
Grap Full Profit | Lack of Skills |
Business Secrecy | Continued Existence Problems |
Low-Cost operations | Fewer Growth Chances |
Complete Control | Complete Loss |
Dissolve Easily | Management Issues |
Social Benefits | Unable to move in Large Scale |
More Credit | Limited Public Confidence |
Flexibilities | More Frauds |
Direct Interactions | Psychological Complexes |
Easily Transfer Ownership | Inspection Problems |
Independence |
Advantages of Sole Proprietorship

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 the stock company.
Personal Interest
As there is a personal element in this class of business organization, the 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 interests.
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 a Sole Proprietorship and Partnership and a joint stock company, the profit is distributed among a number of persons.
Secrecy
In my view, one of the biggest Sole Proprietorship Advantages is secrecy is the important factor that 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 fees. As generally the business is managed by one person, he has not had to pay operational expenses. But the Joint Stock Company is a costly organization.
Entire Control
The most common reason and all-time favorite advantage of a 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 a 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 to the public. He provides the daily necessities of life near their home.
Credit Facilities
Under the sole tradership, the liability of the owners is unlimited. It means that his private assets are also liable to pay the business obligations. This factor enhances the credit facilities from internal and external sources.
Flexibility
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 the 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, assigns duties, and maintains a direct relationship with the workers to achieve the best results for his venture.
On the other side, he develops cordial relations with customers and the general public in order to create 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 a Joint Stock Company.
Independent Sources of Livelihood
A sole proprietorship is an independent form of organization for businessmen around the world. There is no interference from any quarter. He is the supreme authority who enjoys self-determination, the excitement of social relations, 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 today in spite of being an old system.
One man’s 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 the near or far future.



Lisa is a passionate travelers. She spends 3 months every year visiting different places worldwide. She has visited almost every famous place in the world. She herself is an affiliate blogger
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