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JSS1: BUSINESS STUDIES - 2ND TERM

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  1. Types of Occupation | Week 1
    7 Topics
    |
    1 Quiz
  2. Honesty in Business | Week 2
    6 Topics
    |
    1 Quiz
  3. Ethics in Sourcing Chemicals and the Need for the Monitoring and Control of Chemicals | Week 3
    7 Topics
    |
    1 Quiz
  4. Entrepreneurship | Weeks 4 & 5
    5 Topics
    |
    1 Quiz
  5. Forms of Business Organisation | Weeks 6 & 7
    6 Topics
    |
    1 Quiz
  6. Consumer, Market & Society | Weeks 8 & 9
    5 Topics
    |
    1 Quiz
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Topic Content:

  • Definition of Sole Proprietorship
  • Advantages of Sole Proprietorship
  • Disadvantages of Sole Proprietorship

What is Sole Proprietorship?

A sole proprietorship is a form of business organisation, that is owned, organised, and controlled by one person for the purpose of making a profit.

It is also known as a sole trade or one-man business. It is the oldest and most common form of business organisation. The owner is called a sole proprietor or sole trader.

Examples are petty traders, hairdressers, plumbers, fashion designers, etc.

Sole proprietorship - Fashion designer
Fashion designer.

The owner makes decisions alone and the business is not separated from the owner (Unlimited)

A sole proprietorship does not need to be registered or incorporated. It requires a small amount of capital to start operations.

Advantages of Sole Proprietorship:

  • It is simple and costs little to run.
  • It is easy to establish.
  • The owner keeps all the profit and spends the proceeds as he or she wishes.
  • The owner enjoys privacy.
  • It is easy to manage.    
  • It requires a small amount of money to start.
  • The owner enjoys a close relationship with his workers and customers.
  • He or she chooses the location of the business.

Disadvantages of Sole Proprietorship:

  • When indebted, the owner can sell the business.
  • The death of the owner can lead to the end of the business.
  • It cannot quickly expand because of a lack of large capital.
  • It does not allow room for specialization.
  • The owner bears all the risks of the business.
  • They tend to lose their workers to bigger organisations since they are not likely to pay high salaries.
  • They need to sell products at a higher price compared to bigger operators.
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