It is that concern which is owner, manager, controlled and invested by a single person. Hence, it is called sole proprietorship or individual by a single person. Hence, it is also proprietorship or individual proprietorship or single entrepreneur or one-man business. It has been in operation since the birth human cilivilization.
Sole trader make total investments of the business, enjoy form all profit and bears the total risk. He controls the operations applying his own knowledge, skill and ability. He may run the business alone or may obtain the help from family members or employees. The sole trader has to bear unlimited liabilities of the business.
Sole trading concern is then oldest from of business. It is most commonly used business organization. It is easy to start and close. It requires small amount of capital. The sole trader plays the role of all i.e. an owner, manager, a controller, a risk bearer and a decision maker. Thus, it is popular form of business organization.
Some popular definition of sole trading concern by venous famous scholars are given below
i) According to Peterson and Plowman, "A sloe trading concern is a business units whose ownership and management are vested in one person. This indivisual assumes all the risk of loss or failure of the enterprises and recives all profits from its successful operations."
ii) According to Edward T.Elthourne,"A business initiated and operated by one individual who carries all financial and administrative responsibilities employing such assistants as may be necessary."
iii) According to A.N. Agrawal," A person who eastablished and managed a business for his own account and risk is known as a soal trading concern business."
From above meaning and definitions sole trading concern can be defined as a one man business enterprise on which the person sets up the business with his own resources, manages himself, and claims all the profits by bearing all risks and losses.
Character of sole trading concern
a) Single ownership
b) Sole management and control
c) No profit sharing
d) Unlimited liabilities
e) Separated legal existence
f) Limited operations
h) Nominal legal formalities
a) Easy to commence and dissolve
b) Quick decision
e) Personal supervision and control
f) Direct motivation
g) Easy to get loan
i) Social benefits
a) Limited capital
b) Limited managerial
c) Unlimited liabilities
d) Lose in absence
e) Uncertain life
f) Limited scope for expansion and Limited scope for opportunity