The following are the advantages of a Sole trader:
a) Easy Formation:
No legal formalities are required to initiate a sole trading concern. Any person capable of entering into a contract can start it, provided he has the necessary resources for it.
b) Incentive to Work hard:
There is a direct relationship between effort and reward. The fact that the entire profit can be taken by himself without sharing with anybody else induces him to work ceaselessly.
c) Small Capital:
Small capital is an important as well as the specific advantage of the sole proprietorship. The sole proprietor can start the business with small capital.
d) Credit Standing:
Since his private properties are held liable for satisfying business debts, he can get more financial assistance from others.
e) Personal Contact with the Customers:
Since sole proprietor knows each and every customer individually he can supply goods according to their taste and preferences. Thus he can cultivate personal relationship with the customers.
d) Flexibility:
The sole trader can easily adjust himself to the changing requirements of his business.

(i) Ownership by one Man:
(1) This is owned by the single person.
(2) The sole trader contributes the required capital.
(3) He is not only the owner of the business but also manages the entire affairs.
(ii) Freedom of work and Quick Decisions:
1. Since the individual is himself as an owner, he need not consult anybody else.
2. Hence he can take quick decisions.
(iii) Unlimited Liability:
When his business assets are not sufficient to pay off the business debts he has to pay from his personal property.
(iv) Enjoying Entire Profit:
He strives tirelessly for the improvement and expansion of his business and enjoys all the benefits of his hard work.
(v) Absence of Government Regulation:
1. A sole proprietor concern is free from Government regulations.
2. No legal formalities are to be observed in its formation, management or in its closure.
(vi) No Separate Entity:
The sole trading concern comes to an end with death, disability, insanity, and insolvency of the individual.
(vii) Maintenance of Secrecy:
In sole proprietorship as the sole owner manages all the affairs of the business, the secrecy can be maintained easily.

Sole proprietorship is also called as Entrepreneurship.

Decision arrived at, after deep deliberations and discussion are sure to be better than that of a decision taken by one man. It is rightly said two heads are always better than one. The chances of wrong decision- making are quite high in a sole trader business.

A sole trader business need not be registered with any authority as that of partnership and companies. Any person who has money can start the sole trader business. He is to obtain a licence from the local authority like municipality or panchayat.

The liability of the Sole Proprietorship is unlimited. When his business assets are not sufficient to pay off the business debts he has to pay from his personal property.

Because of limited capital and skill, the sole traders have to work on a small scale basis. thus he is deprived of the economics of large-scale operation.

Single person's intelligence and experience may not help him beyond a certain stage. Since he has to focus on each and every activity. his managerial ability is bound to be limited.

Since the capital is contributed by one individual only, business operations have necessarily to be on a limited scale. 

(i) It is a highly flexible type of organisation.
(ii) A sole proprietorship concern is generally run on a small scale basis.
(iii) A change in operation is possible without involving much expenditure.
(iv) The proprietor can adapt and adjust to the changing trends and market conditions because the sole trader is the sole owner of his business.

(i) The sole trader has to undertake all the work relating to business himself such as buying, selling, accounting, financing, advertising etc.
(ii) It would be difficult to avail the services of experts in his business because of small resources.
(iii) So, the benefits of division of labor and specialization cannot be obtained in this type of business.