Identify the characteristics of sole proprietorship where the business and the owner exists together:

No separate legal entity

Characteristics of sole proprietorship: As 'sole' means single and 'proprietor' means owner, this type of business is one person show exhibiting following features:

1) Individual ownership: This business is exclusively owned by a single person.

2) Individual management and control: "What is to be done, how it is to be done, and when it is to be done‖ - all affairs are managed and controlled by the sole proprietor. Though, competent people can also be employed for efficient management.

3) Individual financing: All investment is made by the proprietor. Though, if required he/she has access to loans and debts to procure funds for business.

4) No separate legal entity: Legally, the proprietor and proprietorship are one and the same business and owner exists together, thus with owner's death, business too dies.

5) Unlimited liability: The proprietor is liable/responsible for all losses arising from business. In case the business assets are insufficient to pay off liabilities, his/her personal property can be called upon to pay his business debts.

6) Sole beneficiary: The sole proprietor alone is entitled to all the profits and losses of business. So he/she puts his/her heart and soul to increase his/her profits.

7) Easy formation and closure: Sole proprietorship is subjected to minimum legal formalities and regulations both at the time of commencing and/or closing.

8) Limited area of operation: This form of business generally has a limited area of operation due to:  limited finance availability and limited managerial abilities.