Q.Which of the following is a feature of Sole Proprietorship?

A sole proprietorship is a business that is owned, managed and controlled by a single individual who alone bears all the risks and receives all the profits — sole means only and proprietor means owner. It is the simplest and most popular form, especially suited to small, personalised businesses like a neighbourhood stationery shop, beauty parlour or retail store.

Its defining features flow from being one person's business:

• Ease of formation and closure — no separate law governs it, so it can be started or wound up with almost no legal formality.
• Unlimited liability — the owner and the business are not legally distinct, so personal assets can be used to settle business debts.
• Sole risk-bearer and profit-recipient, with absolute control over every decision.
• No separate legal entity and limited continuity — the owner's death, illness or insolvency can close the business.

Merits: quick decisions, confidentiality, direct incentive to work hard, personal satisfaction, and easy formation/closure. Limitations: limited resources and managerial ability, an uncertain life span, and the burden of unlimited liability. Despite these, it thrives wherever little capital is needed and customers value personal service.