Sole proprietorship:

• A form of business in which the business firm is owned, managed and controlled by only one person is called a sole proprietorship and the person is called proprietorship or sole proprietor.
• According to Louis and Henry, sole proprietorship is such a form of business in which there is only one person at the top who is responsible, who directs business activities and who bears the risk of failure himself.
• From the above definition one can conclude that a lone trader or a sole proprietor is only and wholly responsible for the entire business and that the entire business is carried out under his direction. He alone enjoys the profit and is responsible for loss in business or insolvency.
• The proprietor alone invests capital to start and develop it and looks after all the activities like sale and purchase, marketing, inventory management, etc. He alone reaps the profit and bears the loss.

Example:
Generally, grocery stores, sweet shops, food joints, small trading firm, etc. run as sole proprietorship firms.