Definition of Sole Proprietorship

A sole proprietorship is a mode of business arrangement in which the business is owned and managed by one person. The sole proprietor is the only one who arranges for resources like cash, inventories, building, equipment, stores, cars, etc.


In a sole proprietorship, the owner enjoys all the profits and bears all the losses alone. The funds are also arranged by the owner himself and if the business needs additional funding he will borrow for the business and he himself will be responsible for the repayment. In other words, the day-to-day activities of the business are performed by the owner.

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