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Chapter 4
Slide 1
Formation of a
Sole Proprietorship
Of the four forms of ownership, the sole
proprietorship is by far the easiest to form.
The government exercises very little control
over the establishment of new sole
proprietorships.
Start-up can be immediate and simple.
You may need to obtain licenses or permits
for your particular type of business.
Chapter 4
Slide 2
Operation of a
Sole Proprietorship
Sole proprietors make all the
decisions regarding the operation of
the business.
The assets of sole proprietors are not
considered legally separate from the
assets of the business.
Owners of sole proprietorships report
business income and expenses on
their personal income tax returns.
Chapter 4
Slide 3
Advantages of a
Sole Proprietorship
Chapter 4
Slide 4
Disadvantages of a
Sole Proprietorship
The owner has unlimited responsibility
for losses, debts, and other liabilities
the business might develop.
The owner must make all the
decisions.
The owner is the only person who can
arrange financing or capitalization.
The existence of the business ends
upon the owners death.
Chapter 4
Slide 5
QUALITIES OF
ENTREPRENUERS
Mental ability: intelligent person.
Organising ability: good
organisation.
Hard work: ready to work for long
hours.
Discipline: highly disciplinedeverything to be in order for them.
Clear objectives: regarding nature of
business & products to be produced.
FUNCTIONS OF
ENTREPRENUERS:
Market research
Idea generation
Product/ service analysis
Form of business: individual,
partnership.
Determination of business
objectives: main objectives,
subsidiaries objectives, short term,
long term.
Risk Bearing
Organisation of the Resources:
combining various factors of
production.
Innovation
Exploration of new opportunities
Providing Leadership& Motivating
the people