Q.(a) Explain any five characteristics of sole trading business.

Sole proprietorship, run by a single owner with the least formality, is the earliest and simplest form of business organisation, so it is the oldest.

Sole proprietorship is a form of business owned, managed and controlled by one individual who provides the capital, takes all decisions, enjoys all profits and bears all risks and losses alone. It needs almost no legal formality to start, which is why it emerged first, long before partnerships, companies and co-operative societies developed as more complex forms.

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The oldest form of business organisation is the sole proprietorship, so the correct option is (b).

In the sole proprietorship chapter of the Tamil Nadu HSC Commerce syllabus, this form is described as the earliest and simplest type of business.

• Sole proprietorship is owned, managed and controlled by a single individual. Because it needs little capital and few legal formalities, it came into existence long before other forms and is therefore the oldest form of business organisation. …

The correct answer is option (c) Sole Proprietor, the only form in which ownership, establishment and management rest with a single person.

Among the given forms of organisation:

• A co-operative society is owned and managed jointly by its members through an elected managing committee, so control is not with one person.
• A joint enterprise / joint stock company is owned by many shareholders and managed by a board of directors — clearly not a single individual.
• A government company is owned by the government and run by directors nominated by it. …