When a business unit is owned by a single person, it is called “Sole Trader’s Concern“. It is also known as “One man’s business“. The person who does the business is called the sole trader or sole proprietor.
Definition of Sole Trader Business
In the words of Kimball and Kimball,
It is the oldest and simplest form of business organization.
The sole trader carries on business by himself and for himself. He is the proprietor, manager and controller of business. He raises the necessary capital; organizes the business; enjoys the profits and bears the losses.
According to O.S. Gerstenberg,
Sole trader owns all and risks all
According to Paterson and Plowman,
A sole proprietorship has no legal existence apart from the proprietor himself. He is all in all in the firm.
In the words of L.H.Haney,
The individual entrepreneur form of business organization is an organization at the head of which stands an individual or sometimes a family group of individuals, as the one who is responsible, who directs its operation and who alone runs the risk of failure.”
According to Edward T. Elbourne,
Sole proprietorship is a business initiated and operated by one individual who carries all financial and administrative responsibilities, employing such assistants as may be necessary.
James Stephenson opines,
A sole trader is a person who carries on business exclusively by and for himself. The leading feature of this kind of concern, is that the individual assumes full responsibility for all the risk connected with the conduct of the business. He is not only the owner of the capital of the undertaking but, is usually the organizer and manager and takes all the profits or responsibility for losses.
Features of Sole Trader Business
The important features of sole proprietorship are as follows.
1. A Sole Trader business is owned by only one person.
2. The business is controlled by a single individual.
3. The risk arising out of a sole trade concern is borne by a single person.
4. The liability of the owner of the business is unlimited.
5. The business firm has no separate legal-entity.
6. To set up sole proprietorship, no legal formalities are necessary.