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Proprietary Firms

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Types of Firms

1-    Proprietary Firms

2-    Partnerships Firms

3-    Joint Stock Companies

Proprietary Firms

There is only one owner of the company called as "Proprietor". All the profits/loses were owned by the proprietor.

  • These types of firms do not have a legal status and exists because the proprietor exists and will cease to exist once the proprietor cease to exists
  • Since there is only one owner of the company therefore the capacity to raise funds and take complex decisions becomes limited.
  • If there were loses then to meet those loses, a owner has to sell off his personal properties, since it's a unlimited liability firm.
  • The income is always clubbed with the income of individuals and hence proprietor has to pay more taxes.

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