What is Sole Proprietorship? – Benefits for Startup a Business

Sole proprietorship is the simplest form business form under which one can operate a business. It is not a legal entity. It simply refers to a person who owns the business and is personally responsible for its debts. There is no legal distinction between the assets and liabilities of a business and those of its owner. It is by far the most popular business structure for startups. It doesn’t need any registration with the government but there are some business licenses you need to take while setting up Sole proprietorship firm like sales tax, service tax, import/export code, shop and establishment, etc.


  1. Contacted with the customers: In sole proprietorship a businessman has direct interactions with the customer and cares the likes and dislikes of the public while producing products.
  2. Direct Relationship with Workers: In sole proprietorship a businessman has direct relationship with workers. He can better understand their problems and then tries to solve them.
  1. Easy Formation: Its formation is very easy because there are not legal restrictions required like Registration etc
  1. Easy Dissolution: Its dissolution is very simple because there are no legal restrictions required for its Dissolution and it can be dissolved at any time.
  1. Easy Transfer of Ownership: A sole proprietorship can easily be transferred to other persons because of no legal restriction involved.
  1. Entire Profit: Sole proprietorship is the only form of business organization where the owner enjoys 100% profit.
  1. Entire Control: In sole proprietorship the entire control of the business is in the hands of one person. He can do whatever he likes.
  2. Flexibility: There is great flexibility in sole proprietorship. Business policies can easily be changed according to the market conditions and demand of people.
  1. Honesty: The sole master of the business performs his functions honesty and effectively to make the business successful.
  1. Independence: It is an independent form of business organization and there is no interference no interference of any other person.
  2. Personal Satisfaction: As all the Business activities are accomplished under the supervision of sole owner, so he feels personal satisfaction that the business is running smoothly.
  1. Quick Decisions: Sole proprietor can make quick decisions for the development and welfare of his business and in this way can save his time.
  1. Personal Interest: A sole proprietor takes keen interest in the affairs of business because he  is responsible for profit and loss.
  1. Secrecy: It is an important factor for the development of business. A sole trader can easily maintain the secrecy about the techniques of production and profit.
  2. Social Benefits: It is helpful in solving many social problems like unemployment etc

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