Forms of business association (single trade)

 Forms of business association:

(1) Single business

(2) Partnership

(3) Joint shoulder division

(4) Co-operative Societies

Q: What is a single trade? Explain its features and pros and cons.

Sole Trade:

Individual trade or individual trade is the earliest form of business organization, hence the practice of organizing business in a specific way. In a single trading system, a single person performs all the tasks required to raise capital, conduct business and take risks in the business. Such a person is called Sole Trade and the business started by such a person is called 'Sole Trade'. When the efforts and hard work of a single person lead to the organization of a business, that method is called individual trade or individual trade. Only one person is responsible for the profits or losses incurred in this trade. The business can start or close at any time.

According to Lewis Huney - "A business is when a single person is the head of the business and is responsible for all the activities of the business as well as managing the business and accepting the risk of success.

GENERAL DEFINITION - "Individual trade or individual trade is a form of business which is headed by a single person who is responsible for all the activities in the business. Lifts the load itself.

Characteristics of Sole Trade:

(1) Freedom to start a business

(2) Unlimited liability

(3) Limited scope

(4) Resources of a single person

(5) Heredity and inheritance

(1) Freedom to start a business: -

                                                 Any knowledgeable person who is a citizen of India can start a business in this manner. He has the freedom to start and close a business at any time.

(2) Unlimited Liability: -

                                         In a single trading system, the responsibility of a single trader towards trade is unlimited. Just as if a business makes a profit, it is the sole owner of that profit. If his merchant wealth is insufficient to pay off debts generated from trade, he has to repay those debts from his private assets.

 (3) Limited scope:

                                Insufficient capital, unlimited liability, limited efficiency also limits the scope of a single business. A single trader cannot expand his business beyond a certain limit. Its scope is always limited.

(4) Resources of a single person:

                                                      The business needs a lot of resources to run its business smoothly. Such as: capital, technical advice, efficiency, etc. In a single business, the solutions required for the business have to be matched by a single person. The entire capital invested in this type of business belongs to a single person. He is raising capital from his own savings or by taking a loan. Therefore, the amount of capital is less. Also, it is not financially feasible for a trader to get the technical advice he needs from an expert, but he decides on the technical issues himself.

(5) Heredity and Inheritance -

                                                 Sole trade is run according to heredity and inheritance rights. In case of death or termination of a single trader, the ownership of the business automatically passes to his children by inheritance, i.e. solo trade is run according to heredity and inheritance rights.