Sole proprietorship is a popular form of business organization and is the most suitable form for small businesses, especially in their initial years of operation. Sole proprietorship refers to a form of business organization which is owned, managed and controlled by an individual who is the recipient of all profits and bearer of all risks. This is evident from the term itself. The word “sole” implies “only”, and “proprietor” refers to “owner”.
Hence, a sole proprietor is the one who is the only owner of a business.
This form of business is particularly common in areas of personalized services such as beauty parlous, hair saloons and small scale activities like running a retail shop in a locality.