Question

Which form of business organisation is preferred on the basis of cost and case of formation?

Answer 1

Sole Proprietorship: Sole Proprietorship in simple words is a one-man business organisation. It is the type of entity that is fully owned and managed by one natural person (not a legal person/entity) known as the sole proprietor. The business and the man are the same, it does not have a separate legal entity.

A sole proprietorship usually does not have to be incorporated or registered. It is the simplest form of business organisations and the ideal choice to run a small or medium scale business. Let us look at some important features of a proprietorship.