Does Sole Proprietorship have any Social Value Attached to it?
“Sole Proprietorship can be called a social necessity because of the fact that one person is needed to start it but he has to take help from a lot of people for its growth. ”
Everything has got limitations and so does the Sole-Proprietorship form of business. In fact, limitations of sole proprietorship have lead to the development of other forms of organizations.But, on the contrary, the wide spread use of other forms of business organizations has not eliminated sole proprietorship. It continues to be most popular form of organization in almost every country.
It can be called a social necessity because of the fact that one person is needed to start it but he has to take help from others for its growth. The number of sole proprietors is very large and they employ many persons as their helpers. So, sole proprietorship is instrumental in providing employment to a large number of people.
This form of organization can be undertaken by persons of all economic strata. A person with small resources can start a business at a small scale. For example, a fruit seller can start his business with a few hundred bucks and get his money back at the end of the day. A person can even change his line of business if it does not seem appropriate to him because it is less risky to do so.
The consumers are provided goods at low rates under this form of business. The number of sole traders being large, they have stiff competition from one another and this leads to a reduction in the prices.
The operating cost of this business is normally less. This form of organization acts as a constraint on monopolistic inclinations of other forms of organizations. A large number of persons enter the business so this results in equal sharing of money. When the business is in the hands of a few persons, it results in the concentration of wealth in limited hands only.
Sole traders in setting up their business help the consumers a lot. For example, sole proprietors open their shops in the streets so that consumers who live nearby are able to procure products from them.
The main motive behind such an act is not the convenience of the consumer but the profit motive of the owner. But from the point of view of consumers, it is an indirect service to them.
Author - DeeKay
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