There a many features of a Sole Proprietorship Business. One major advantage of sole proprietorships is that they are easier to start than partnerships.
Because the owner is responsible for everything from the business's financial stability to its day-to-day operations, there is less bureaucracy and paperwork involved in running a sole proprietorship than in a partnership. In addition, sole proprietorships are often less expensive to operate than partnerships because the owner is not liable for any of the other partners’ debts.
A Sole proprietorship, also called sole trader or simply a proprietorship, is a type of business entity that is owned and run by one individual and in which there is no legal distinction between the owner and the business. The owner receives all profits (subject to taxation specific to the business) and has unlimited responsibility for all losses and debts.
Sole Proprietorship is arguably one of the most popular business structures in Nigeria. It is a form of business that many Nigerians like Tailors, Carpenters, Technicians, Barbers, and Grocers start on a small-scale, because it is easy to establish, and registration is uncomplicated.
Features of Sole Proprietorship Business
The salient features of a sole proprietorship form of organization are as under:
- Single Ownership. A sole trading concern is owned by one individual. It is run entirely at his risk of loss. The sole trader provides both capital and management to the business.
- Personal Organization or Common Identity. A sole tradership concern has no separate legal entity independent of the owner. The owner and the business concern are one and the same. The owner owns everything the business owns and he owes everything the business owns.
- Capital. In a sole proprietorship, the capital is employed by the owner himself from his personal resources. He may also borrow money from his friends and relatives if he cannot depend solely on his personal resources.
- Unlimited Liability. The liability of the proprietor for the debts of the business is unlimited. The creditors have the right to recover their dues even from the personal property of the proprietor in case the business assets are not sufficient to pay their debts.
- One-Man Control. A sole proprietorship is a one-man show. The sole trader provides management to the business. He takes all the decisions, procures material resources, employs persons, and directs and controls the affairs of the enterprise. He is not required to consult anyone else in taking any decision.
- Profits and Losses. The surplus arising in the business of the sole trader entirely belongs to him and similarly, all the business losses and risks are to be borne by him alone.
- Risk Bearing: In this form of organization, the proprietor is the sole beneficiary of profits. If there is a loss, he alone has to bear it. Thus, the risks of the business are borne by the proprietor himself.
- No Special Legislation. A sole proprietorship is not governed by any special legislation. A partnership firm is governed by the Partnership Act, a joint stock company is governed by the Companies Act, and a co-operative society is by the Co-operative Societies Act. Any person who is competent to contract can start his business as a sole trader.
SplashDict is equipped with accredited experts and the necessary resources to assist you in completing the sole proprietorship business registration in Nigeria.
You will get;
- Instant Delivery of Digital Copies of all incorporation documents once approved (Certificate Of registration, Status Report, and Certified True Copy of Application Form).
- FIRS' Tax Identification Number Inclusive.
- Bank Account Opening support.
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- 3 to 14 Business Days Delivery.