Forms of business organization:

Definition of Sole Proprietorship:

J.L. Hanson: ―A type of business unit where one person is solely responsible for
providing the capital and bearing the risk of the enterprise, and for the
management of the business.
‖ Thus, ̳Sole Proprietorship‘ from of business organisation refers to a business
enterprise exclusively owned, managed and controlled by a single person with
all authority, responsibility and risk.

CHARACTERISTICS OF SOLE PROPRIETORSHIP FORM OF
BUSINESS ORGANISATION:
(a) Single Ownership: The sole proprietorship form of business organisation
has a single owner who himself/herself starts the business by bringing together
all the resources.
(b) No Separation of Ownership and Management: The owner
himself/herself manages the business as per his/her own skill and intelligence.
There is no separation of ownership and management as is the case with
company form of business organization.

(c) Less Legal Formalities: The formation and operation of a sole
proprietorship form of business organisation does not involve any legal
formalities. Thus, its formation is quite easy and simple.
(d) No Separate Entity: The business unit does not have an entity separate
from the owner. The businessman and the business enterprise are one and the
same, and the businessman is responsible for everything that happens in his
business unit.
(e) No Sharing of Profit and Loss: The sole proprietor enjoys the profits alone.
At the same time, the entire loss is also borne by him. No other person is there
to share the profits and losses of the business. He alone bears the risks and reaps
the profits.

(f) Unlimited Liability: The liability of the sole proprietor is unlimited. In case
of loss, if his business assets are not enough to pay the business liabilities, his
personal property can also be utilized to pay off the liabilities of the business.
(g) One-man Control: The controlling power of the sole proprietorship
business always remains with the owner. He/she runs the business as per his/her
own will.