This is form of business ownership owned and
operated by one person, and managed by same person. It is simple to form, as it
requires only the completion of the registration of the business name form with
the company and allied
operated by one person, and managed by same person. It is simple to form, as it
requires only the completion of the registration of the business name form with
the company and allied
matters agency at Garki, Abuja.
Common features
i.
Ownership: it is owned by one person
ii.
Formation: it is easy to form
iii.
Control: it is controlled by the owner and no one else
iv.
Legal status: it has no legal entity
v.
Continuity: the death of the owner may lead to the end of the business
vi.
Liability: the liability of its owner is unlimited
vii.
Source of finance:
·
Personal saving
Personal saving
·
Borrowing from friends, relative etc
Borrowing from friends, relative etc
·
Borrowing from money lender: Osusu, cooperative societies etc
Borrowing from money lender: Osusu, cooperative societies etc
Advantages
·
The owner does not share its profit with any one
The owner does not share its profit with any one
·
He maintains close contact with customers and workers
He maintains close contact with customers and workers
·
He is willing to work harder since he doesn’t share profit
He is willing to work harder since he doesn’t share profit
·
He makes decisions alone and quickly
He makes decisions alone and quickly
Disadvantages
·
Death of the owner may stop the operation and existence of the business
Death of the owner may stop the operation and existence of the business
·
The business cannot adequately expand due to lack of funds
The business cannot adequately expand due to lack of funds
·
Liability of the owner is unlimited
Liability of the owner is unlimited
·
He cannot compete efficiently with other forms of business
He cannot compete efficiently with other forms of business