Question

Q2. What are the advantages and disadvantages of Sole Proprietorship? Detailed information and discussion is necessary. (0.5 point)

Answer 1

Answer - Sole proprietorship is the form of business which is managed and controlled by a single person . The advantages and disadvantages are as follows-

Advantages

1 - He is the sole owner thus he does not have to dilute his control over decision making

2 - The business is mostly small and so he does not have to bear much burden of funding

3 - He is the sole reaper of the profits of the business

4 - The business can be formed or closed down with negligible formalities.

Disadvantages -

1 - The sole owner has to bear all the risk and losses alone

2 - The life of the business is very limited and there is no perpetual succession

3 - Lack of expertise in all fields creates problem in some operations of business