Write short notes on the following.
Features of a proprietorship
Features of a proprietorship:
i. Easy formation and closure: This form of organisation requires minimum legal formalities while forming and closing down
ii. Unlimited liability: A sole proprietor has unlimited liability; this implies that the personal assets of the proprietor can be
utilised in case the business assets fall short of debt obligations.
iii. Direct incentives: As the sole proprietor enjoys all the profits and bears all the risks and losses associated with the
business, he/she gets direct incentives while running the business.
iv. Single ownership: It is managed and controlled single-handedly by the proprietor only.
v. Secrecy of information: In a proprietorship firm, all the decisions are taken by the proprietor; therefore, he/she retains
maximum business-related secrecy.
vi. Minimum government regulations: As a sole proprietorship firm is not governed by any laws and acts, there is minimum
government interference in its operations.