Group : E

Name of members:-
Suman shrestha
Yubraj thapaliya
Sashank siwakoti
Sumina khatri

LET’S START
 Presentation of business

Topics : sole trading concern

 introduction
Characteristics
Advantages
Disadvantage
Procedure of registration and
renewal of business.
Introduction ::
A business organization owned by a single
person’s capital investment and operated
by the same single owner is sole trading
concern. Owner is only one investor . S/he
has sole authority in management of
business , all profit and loss are bear by
owner. This organization is registered under
“private form registration act 1958”.
 characteristics
1. Sole ownership
2. Unlimited liability
3. Sole management and control
4. Lack of legal existence
5. Maintain secrecy
6. No sharing of profit and loss
1. Sole ownership

The most important feature of

sole trading business is sole
ownership. The capital is raised by
the same sole owner . The owner has
to take whole responsibility of all
dimensions , transaction and
management by the Owner.
2.Unlimited liability

Unlimited liability means that in

case of dissolution of the business or
in any other case, the owner is
obliged to repay the loan from his/her
personal property if the business
cannot pays due amount to lender.
3. Sole management and control
The business owner is responsible to
manage the sole trading concern. Besides
important business management functions
such as planning, staffing, directing, and
motivating employees is also done by
owner .
4. Lack of legal existence
Compared to other business, sole
trading concern need not complete
many legal formalities in registration,
operation or dissolution of sole
trading business. It is not considered
as legal body.
5. Maintain secrecy
Since sole proprietor conducts every
activities of business, S/he can keep
all details secret . Sole trading
concern don’t have to publish their
details in public . So this business has
greater possibility of maintaining
confidentiality.
6. No sharing of profit and loss
As the owner of sole trading concern
is single person, owner don’t have to
distribute profit of business to other
person neither shares loss . All profit
is enjoyed by owner and bear all loss.
 Advantages
1. Easy to establish and dissolve
2. sole ownership on profit
3. Close relation with costumer
4. Flexibility to operation
5. Effective management and control
1. Easy to establish and dissolve
It is very easy to establish sole
trading business. It requires no legal
formalities while starting and ending
the business. There is no need M.O.A
and A.O.A while registration of
business.
2. Sole ownership on profit
As the owner of sole proprietary
business is the investor, the manager
and the risk taker , the owner
himself/herself is also the sole user of
the profit. S/he don’t have to distribute
his profit.
3. Close relation to costumer
As the owner in a sole trading
business organization will also be the
manager of business, so s/he will have
direct relationship to the customer. It
will help owner to know about the
need and desire of the customer .
4. Flexibility in operation
Flexibility of business is an
important key to business success .
Since the owner alone takes every
decision of business, the owner can
change the size, location, shape etc of
business as he wishes.
5. Effective management and control
Sole trading concern is operated under
the direct management and control of
single person . This brings uniformity in
Decision and communication, effective
control and coordination helps the
business to brings positive results.
 Disadvantage
1. Limited capital
2. Unlimited liability
3. Uncertain existence
4. Difficult to obtain loan
5. Impractical decision
1. Limited capital
The main disadvantage of sole
trading business is limited capital.
There is only one investor in this type
of business. The amount of capital will
be less. So, it is not possible to run
large-scale business, expand and
develop business because of
insufficient capital.
2. Unlimited liability
Unlimited liability of owner means
that if the business cannot pay the due
amount to the lenders even after
selling the assets of the business, the
owner has to pay the due even by
selling his/her personal property. This
is the main risk and disadvantage for
the owner.
3. Uncertain existence
Sole trading business is directly
linked with the owner. The business
exists until the owner of business stay
in business. However, in the death,
madness, insolvency or bankrupt of
owner , the business also doesn’t
exist.
4. Difficult to obtain loan
Various individual and organization
cannot trust a single entrepreneur.
Since the privacy of sole trading
concern is higher and also this
business doesn’t have certain
existence, the money Lender might
reluctant to pay loan .
5. Impractical decisions
In sole trading concern, the owner
is to decide on various issues related
to the business. A person may not
have same level of knowledge on
different fields. Therefore, when the
business owner decides on any other
issue , the decision is more likely to
be impractical.
Procedure of registration
Submission of application form

Payment of registration fee

Obtain registration certificate

Registration in tax office

1. Submission of application form
One must first contact to the concern
office of government to register a
new sole trading business and get
application form. By private form
registration act,1958, if an
entrepreneur wants to carry out the
business related to commerce, then
he should go to commerce , supply,
department.
 If the firm is doing business other
than the commerce than it should be
registered in department of industry.
The person should fill application and
submit to concerned department
along with the prescribed form i.e.
Rs100 .
The application form must contain:-
 The name of private firm.
 The address of the firm.
 Proposed capital of business.
 Objective of the firm.
 Function and the details of goods or
commodity to be dealt by firm.
 The name and address of the owner.
 Other details prescribed by government.
2. Payment of registration fee
As per the rules, the applicant has to
attach the original receipt of payment
of registration fee. The registration fee
will be decide as per capital of
business decide by government.
Capital (in Rs ) Registration fee(in Rs)
Up to 10,00,000 1,000/-
10,00,001 to 50,00,000 5,000/-
50,00,001 to 1,00,00,000 10,000/-

1,00,00,001 to 10,00,00,000 50,000/-

Over 10,00,00,000 75,000/-

Note :- For Dalit ,women the registration up to

Rs 1,00,00,000/- is Rs 100/- and over
1,00,00,000/- is 50% of normal fee.
3. Obtain registration certificate
After submitting application with
registration fee, they will provide you
registration certificate if all the details
are correct and valid. After getting
certificate entrepreneur can start his
business.
4. Registration in tax office
After registering the business, the
sole trading concern should register
the business in the concerned tax
administration office for tax propose.
 Procedure of renewal
There is a provision in the rule
made under the private form
registration act ,1958, the owner of
sole trading business must renew the
firm before the ending of firm’s term.
The term of firm is 5 years. Non
renewed business organization are
illegal. Sole proprietor must renew
within 35 days of expiry.
Contd…
Necessary fees and document
required for renewal, such as PAN,
copy of registration certificate , proof
of tax payment. For renewal
entrepreneur must visit concerned
department with renewal fee
prescribed by government. Fee is
decide by the capital of business.
Capital (in Rs ) Renewal fee(in Rs)
Up to 1,00,000 600/-
1,00,001 to 3,00,000 1,000/-
3,00,001 to 5,00,000 1,600/-
5,00,001 to 20,00,000 3,000/-
20,00,001 to 1,00,00,000 5,000/-
1,00,00,001 to 5,00,00,000 8,000/-
Over 5,00,00,000 15,000/-

Note:- Nepal government determine and

changes time to time by publishing the
information in the Nepal Gazette.
Thanks' for your time

By : Group ‘E’
To : munni ma’am