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Business Organization may take various forms. The most important forms of business
organization are:
a. Sole Trading Concerns b. Partnership Firms
c. Joint Stock Companies d. Cooperative Societies
e. Public Enterprises f. Multi-national Corporations
The principal factors which differentiate one from another are the nature of ownership
of the business unit and its legal constitution.
Sole Trading Concern

Sole trading concern is the oldest form of business organization. The word “Sole”
means single or only one whereas trading means carrying out a business activity.
So, in simple words, sole trading is a business carried out by a single person. It is
owned, managed and controlled by a single person. He invests capital, makes all the
decisions of the business by himself, enjoys all the profit and bears all the losses. Sole
trading is a widely found business as it is easy to start and dissolve.
A person who carries on business exclusively his own account and risk is known as a
‘sole trader’. Variously described, the sole proprietor of a business unit is called a sole
trader. In our country joint family system is very widespread and many business units
are owned by a family rather than an individual. Such family concerns are treated as
sole trading concerns. A sole trader is known as an ‘individual entrepreneur’ or an
‘individual proprietor’.

According to A.N. Agrawal – "A person who establishes and manages
a business for his own account and risk is known as sole proprietorship
business."

According to Prof. L.H. Haney, ”The individual entrepreneurship is the form
of business organization at the head of which stands an individual as the
one who is responsible who directs its operations, who alone runs the risk of
failure.”

Advantages of sole trading
A sole trading concern has the following merits:

Firstly, it can be set up very easily and quickly. Anybody who wants to start a trading
concern can do so whenever he likes; there is nobody to create obstacles in his way.
The law of the land does not require him even to apply for registration or to fill in
some legal form; and absolutely no expenditure need be incurred in the formation of
the establishment.

Second, the sole trader is the sole dictator of the business and relatively free from
outside interference. He is capable of taking quick and prompt action so necessary for
business success.

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