VOLUNTARY WINDING UP UNDER THE SUPERVISION OF COURT

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According to section 396 of Companies Ordinance, a voluntary winding up of a company can also be carried under the strict registration of the court. 1.  Resolution At first, company has to pass special resolution for the voluntary winding up of the company. 2.  Supervision Order Following are the common grounds on which the court issues the supervision order: 1.  The liquidator performs his duty in partial manner. 2.  The winding up resolution is obtained by fraud. 3.  The liquidator does not strictly observe the rules of winding up the company 3.  Power of the Court The court has the power to appoint an additional liquidator, or to remove any liquidator. 4.  Dissolution After the supervision order is made, the liquidator may exercise his powers in winding up of a company.  On completion of winding up, the court will make an order that the company is dissolved. Share Capital; In simple words, the term “capital” means the particular amoun...
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Sole Proprietorship

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Sole Proprietorship and its Characteristics 


Sole proprietorship is a simple and oldest form of business organization.  Its formation does not require any complicated legal provision like registration etc.  It is a small‐scale work, as it is owned and controlled by one person, and operated for his profit.  It is also known as “sole ownership”, “individual partnership” and “single proprietorship”.

DEFINITION 

Following are some important definition of sole proprietorship: 
   1.  According to D.W.T. Staffod 

“It is the simplest form of business organization, which is owned and controlled by 
one man.” 

2.  According to G. Baker 

  “Sole proprietorship is a business operated by one person to earn profit.”

CHARACTERISTICS 

Following are the main characteristics of sole proprietorship: 

1.  Capital 

In sole proprietorship, the capital is normally provided by the owner himself.  However, if additional capital is required, such capital can be increased by borrowing.

2.  Easy Dissolution 

The sole proprietorship can be easily dissolved, as there are no legal formalities involved in 
it. 

3.  Easily Transferable 

Such type of business can easily be transferred to another person without any restriction. 

4.  Freedom of Action 

In sole proprietorship, single owner is the sole master of the business; therefore, he has full 
freedom to take action or decision. 

5.  Formation 

Formation of sole proprietorship business is easy as compared to other business, because it 
dos not require any kind of legal formality like registration etc. 

6.  Legal Entity 

In sole proprietorship, the business has no separate legal entity apart from the sole traders.  

7.  Legal Restriction 

There are no legal restrictions for sole traders to set up the business.  But there may be legal 
restrictions for setting up a particular type of business. 

8.  Limited Life 

The continuity of sole proprietorship is based on good health, or life or death of the sole 
owner. 

9.  Management 

In sole proprietorship, the control of management of the business lies with the sole owner. 

10.  Ownership 

The ownership of business in sole proprietorship is owned by one person. 

11.  Profit 

The single owner bears full risk of business, therefore, he gets total benefit of the business 
as well as total loss.

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