Solution:

Advantages:

• Prompt decision making:

  Owner is prompt in decision making since there is to be consulted.

• Operational flexibility:

  The organization is easy to operate and it is extremely flexible.

• Prompt decision making:

  Owner is prompt in decision making since there is to be consulted.

• Easy to dissolve:

  The business can be dissolved at any time.

• Coordination of effort and reward:

  efforts and rewards are directly related in this type of ownership.

• No coordination:

  There is no problem of coordination in the organization.

• Easy formation:

  It is very easy to bring the business to existence.

Disadvantages:

• Sole Responsibility:

  The owner is liable fore all obligations and debts of the business.

• Expanding Business is difficult:

  It will be difficult to raise capital in order to expand the business.

• Owner is not a Master of All:

  The owner of the business cannot be a master of all techniques, like management, sales and engineering etc.

• Limited Capital:

  The amount of capital that can be invested will normally be very limited.

• Unlimited Liability:

  When the business fails, the creditors take away the personal property as well as business property to settle their claims.

• Limited Life:

  The firm ceases to exist with the death of the owner.

• Owner is not a Master of All:

  The owner of the business cannot be a master of all techniques, like management, sales and engineering etc.

• Expanding Business is difficult:

  It will be difficult to raise capital in order to expand the business.