What is a Proprietor? Meaning, Features, and More.

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There are many types of businesses in the market like Public Limited Company, Private Limited Company, Partnership Firm, Sole Proprietorship, etc. and the objectives, formation, operations, etc. of all these businesses are different from each other. Out of these businesses, the proprietor is related to the sole proprietorship business.

A sole proprietorship business is run by the proprietor and all the formalities are completed by the proprietor himself. If anything happens in the business, the proprietor himself is responsible for it and he cannot hold anyone else responsible for the incident even if the incident is caused by someone else.

What is a Proprietor?

The proprietor is a person who owns the sole proprietorship business and bears all the profits and losses. All the legal activities in the business are carried out by himself. The liability of the proprietor towards the business is unlimited and he has to pay income tax on whatever profit he earns* from the business because, in a sole proprietorship business, the owner and the business are considered to be one and the same.

A sole proprietorship business being the simplest business form offers the proprietor many benefits such as there is no need to register the business, the business can be started and closed anytime, the business cannot be separated from the owner, etc. But the proprietor may have to complete certain formalities related to the business if required by the governing authority.

Features of a Proprietor

Following are the features of a proprietor:

1. Owner:

A proprietor is an owner of the sole proprietorship business because, in a sole proprietorship business, the owner is called the proprietor. In different business forms, the owner is known by different names like as a partner in the partnership business, as a shareholder in the company, etc.

2. Unlimited Liability:

The liability of the proprietor in the business is unlimited because according to the concept of sole proprietorship business, the owner and the business are one and the same. Until the proprietor pays the entire liability of the business, he remains a debtor, and personal property is also used to repay the debt.

3. Full Control:

The proprietor has complete control over the business as he is the sole owner of the business. All the activities in the business are carried out by the proprietor himself and there is no need to take permission from anyone to carry out the activity. The proprietor can do whatever he wants in the business but within limits.

4. No Profit and Loss Sharing:

The proprietor is not able to share the profit and loss with other individuals as the concept of sole proprietorship business does not allow this. Whatever profit is made in the business will belong to the proprietor only and whatever loss is incurred will also be borne by the proprietor.

5. Full responsibility:

The proprietor is fully responsible for whatever happens in the business, even if the incident is caused by someone else and the proprietor cannot hold anyone else responsible for the incident. The main reason for this is that according to the concept of sole proprietorship business, the owner and the business are one and no other person can run the business.

Read Also:

• What is Sole Proprietorship? Meaning, features, and more.
• Advantages and Disadvantages of Sole Proprietorship

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