; (1) Simplicity:

The sole trading firm is the oldest and the simplest form of business organisation.

(2) No legal formalities: No legal formalities are required for the formation and closing of a sole trading firm. (3) Single ownership business: It is a one man show. It is owned and managed by a single person. The total required capital is invested by sole person. (4) Self employment: The sole trader puts his own labour in conducting his business. If necessity arises, he may employ a few paid assistants or use the service of the members of his family. (5) No sharing of profits and risks: The sole trader enjoys all the profits of the enterprise and similarly bears all the losses or risks involved in the business. (6) Exclusive managerial rights: The sole trader possesses the sole authority and right to manage the business. (7) Ere from Government regulations: The sole trading concern is not required to undergo any special legislation of legal formalities. (8) Unlimited liability: The liability of a sole trader is unlimited. Hence, for business debts, not only his business assets but also his private assets become liable. (9) Generally local business: The activities of a sole trader are generally confined to a certain locality. (10) Legal status: The legal status of a sole trader and that of the concern is the same. Hence, a sole trading concern solely depends upon the life of the sole trader.
(1) Easy of Establish : Sole trading concern can be established very quickly and easily. Anybody who wants to start a business can do so, whenever, he likes. In Nepal, only nominal

legal formality of registration is necessary. (2) Easy to Dissolve : Dissolution of sole trading concern equally simple. There are no legal formalities in this regard. Proprietor can dissolve business whenever he likes to do so. (3) Effective Control : In this form of business organization proprietor is responsible for all types of activities. He controls all functions and takes decisions at appropriate time. So, the business is controlled in an effective way. He controls all functions and takes decisions at appropriate time. So, the business is controlled in an effective way. (4) Direct Motivation : The direct relationship between effort and reward serves as a powerful incentive to the proprietor to manage the concern efficiently. The proprietor being entitled to the entire profits of the concern tries to maximize profits by utilizing his talents and activities in the best possible way. (5) Personal Supervision : The proprietor is able to supervise every work of the business himself. This helps to build up a close and cordial relationship with the employees. He can take personal interest in his customers and he can meet their individual and typical needs easily and adequately. It ensures effectively and economy in the operation. (6) Benefit of Unlimited Liability : The proprietor can obtain loan on his personal credit. The liability being unlimited, the creditors feel secure in extending credit. (7) Prompt Decision : The owner has full control over his business. So he is able to take decision promptly without consulting anybody. If more than one person is involved in decision making then delay is bound to occur. (8) Secrecy : The proprietor can maintain business secrets. There is no legal regulation regarding the disclosure of business information. So he can maintain secrecy from his competitors. Secrecy is very vital for business success. (9) Flexible : Sole trader enjoys the maximum flexibility in his business. If any change in business is required, he does no have to consult any one and can make the change without delay. No legal formalities are required for making changes in operations. This gives flexibility to this type of business.

(10) Social Importance : From social viewpoint sole trading concern is important because: (a) It is a means for earning livelihood independently. (b) It avoids concentrating wealth in few hands. (c) It brings competition among sole proprietors, so they provide goods in cheaper rates to the society. (d) Qualities like self-reliance, self-confidence, tact and initiative are developed in this organization. The disadvantage of sole trading concern are as follows : (1) Limited Capital : The capital of one proprietor is usually small. It is limited to his personal savings andborrowing on personal security. Hence, he cannot undertake further expansion and development lack of excess capital and fails to enjoy the internal and externaleconomics of scale. (2) Limited Management Ability : In the present competitive world complexities of managerial jobs are increasing everyday. One man cannot be expert in each and every function of the business. For lack of resources he may not be able to use the services of experts. So limited managerial ability will hinder the growth of the firm. (3) Unlimited Liability : The unlimited liability of sole proprietorship is a greatdisadvantage. A loss in business may deprive the proprietor of his assets too. So big business firms requiring more economic risk are not established under this organization. (4) Uncertain Life : The success of this type of business depends on thepersonal capacity of proprietor. In case of his death business may be discontinued. The successors may not have the same degree of self-reliance and ability. Thus, there is no continuous existence of the firm. (5) Dull and Monotonous Work : The proprietor has the sole right on profit of the business. So he tries to work more to earn more profit. Consequently the work becomes dull and monotonous. His health is badly affected and he is deprived of pleasant social relations and cordial family life. (6) No Large Economics and Specialization : A small scale business cannoteconomies in purchases, production and marketing. Similarly the benefit of specialization of service of experts cannot be obtained. (7) Loss in Absence : A sole trading has to suffer from the long illness of the proprietor. In his absence business comes to a standstill. This can lead to heavy losses. Employees may not be efficient or they may not take sincere interest.

(8) Possibility of Wrong Decision : In sole trading a businessman alone makes all the decisions. Hence, decisions may not be always right and wise. When a considerable number of people are involved in decision making process a wise and mature decision is possible.

Advantages of Partnership:
i. Easy formation: The formation of partnership is very easy. Simply an agreement among the partners in oral or written words can bring a partnership into existence. It includes very less legal formalities and expenses. ii. Large resources: A partnership is in a position to accumulate large resources as more than one contributes capital. The added financial strength of the partners can be utilised to increase the scale of operation of the business. New partners can be admitted to meet the additional requirement of fund. iii. Diverse skills and expertise: Partnership provides a scope for association of persons with diverse skills and expertise. Partners having expertise and skills in different functional areas of business can manage the business efficiently. iv. Flexibility of operations: Like that of sole proprietorship the partnership can bring changes in its operation easily and quickly looking at the changing circumstances. Such changes cannot be implemented in a company with ease because of the restrictions imposed. v. Sharing of risk: The losses of the firm and other associated risk in business are shared by the partners. Hence, the share of risk of each partner is less in comparison to sole proprietorship. vi. Benefits of unlimited liability: Since the liability of the partners is unlimited it acts as great check against speculative activities and partners shall not be careless in managing the business. Further, the firm enjoys good credit standing and easily obtain loans because the creditors can realise their loan amount from the private property of the partners. vii. Promptness in decision making:

Since the partners meet quite frequently, they can arrive at decisions promptly. Thus, business opportunities requiring quick decision shall not be lost. viii. Close supervision: Partners take active part in the management of the business. The close supervision of partners eliminates wastage and leads to greater efficiency. ix. Reduced management cost: Since different functional areas are managed by the partners themselves, the huge managerial expenses can be saved to a great extent. x. Secrecy: There is no statutory obligation on the part of partnership to publish the accounts of the firm. Hence, the business secrecy can be maintained to a certain extent. xi. Protection of minority interest: Every partner has a right to participate in the management. All important decisions are taken unanimously by the partners. There is no scope to disregard the interest of a minority group of partners. xii. Relationship between effort and reward: There is a direct relationship between effort put by partners and reward. If the business is managed efficiently, the reward shall b< in the form of more profit, better customer satisfaction and good image of the business.

Disadvantages of Partnership:
Eventhough, partnership form of business is comparatively better than sole proprietorship form of business, still it is not the only best option available to an entrepreneur. The following are some of the important shortcomings of partnership form of organisation which must b carefully studies before finalization of this form of business. i. Limited capital: There is a limit to the maximum number of partners in a partnership Therefore, the capital that can be raised from the partners is limited. Large-scale business requires huge capital and partnership is not the proper form to meet the requirement. ii. Unlimited liability:

Like that of the sole proprietorship, unlimited liability is a important drawback of partnership. The risk of loss of private property of the partnership influences the partners to avoid further risk and play safe. iii. Instability: There is instability in existence because a successful firm can be dissolve on the death, insolvency or lunacy of a partner. The difference of opinion may also bring about closure of the business. The sudden closure of a successful business is a great social loss. iv. Risk of implied authority: A partner acts as an agent of the firm and his acts bind the firm and other partners. A dishonest or incompetent partner may lead the firm in difficulties because the other partners shall have to pay for the dishonesty or inefficiency < a partner. v. Lack of harmony: Difference of opinion is the natural consequence in partnership. The conflicts and lack of harmony among the partners may not be beneficial for the business and sometimes even that lead to dissolution of the firm. vi. Non-transferability of interest: No partner can transfer his interest in a firm to third party without the consent of the other partners. Thus, a partner does not enjoy the freedom of converting his interest in the firm into cash. vii. Lack of public confidence: There is no legal binding on the firm to publish accounts. The public may suspect that the firm is earning huge profit at the cost of the consumers. Thus, the firm lacks confidence of the public. viii. Cautious approach: The very approach of unlimited liability make the partners over cautious. This restrict the partners in taking up any risky ventures and thus misses ma business opportunities.