University Of Mumbai

“A study on sole proprietorship retail sector with focus on Jio”

Bachelor of Management Studies

Semester VI

(2020 - 2021)

Submitted by

Sameer Shaikh
 Cosmopolitans’s
ValiaC.L.College of Commerce & Valia L.C. College of Arts

D.N.Nagar, Andheri (West), Mumbai-400053.

 University Of Mumbai

“A study on sole proprietorship retail sector with focus on Jio”

Bachelor of Management Studies

Semester VI

Submitted
In Partial Fulfillment of the

requirements For the Award of Degree

of

Bachelor of Management Studies

By

Sameer Shaikh
 Cosmopolitans’s

ValiaC.L.College of Commerce &Valia L.C. College of Arts

D.N.Nagar, Andheri (West), Mumbai-400053.

 DECLARATION

I, _____Sameer Shaikh_____________ the student of TY.BMS

Semester Vl (2020 - 2021) hereby declare that I have completed the
project on _____A study on sole proprietorship retail sector with
focus on Jio _____.

The information submitted is true and original to the best of my

knowledge.

(Signature of Student)

Sameer Shaikh

Roll no. 45
 Cosmopolitans’

sValiaC.L.College of Commerce &Valia L.C. College of

Arts D.N.Nagar, Andheri (West), Mumbai - 400053.

 CERTIFICATE

This is to certify that _________________________________ has worked and

duly completed her/his Project Work - I for the degree of Bachelor of
management studies under the faculty of Commerce
______________________________________ and her/his project is entitled,
“_____________________________________” my supervision. I further
certify that the entire work has been done by the learner under my guidance and
that no part of it has been submitted previously for any Degree or Diploma of
any University. It is her/his own work and facts reported by her/his personal
findings and investigations.

______________________ ______________________

Prof. Ankita Das Principal, Dr. Shobha Menon

(Course Coordinator) Valia C.L. College

______________________ ________________________

Prof. External Examiner

 ACKNOWLEDGEMENT

To list who all have helped me is difficult because they are so numerous
and the depth is so enormous.

I would like to acknowledge the following as being idealistic channels

and fresh dimensions in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me

chance to do this project.

I would like to thank my Principal, Dr. Mrs. Shobha Menon for

providing the necessary facilities required for completion of this project.

I take this opportunity to thank our Chief Co-ordinator Prof.

RajlaxmiNayakand our Course Co-ordinator Prof. Ankita Das, for
their moral support and guidance.

I would also like to express my sincere gratitude towards my project

guide Prof. ___Shipra Singh_____________ whose guidance and care
made the project successful.

I would like to thank my College Library, for having provided various

reference books and magazines related to my project.

Lastly, I would like to thank each and every person who directly or
indirectly helped me in the completion of the project especially my
Parents and Peers who supported me throughout my project.
 CHAPTER 1 : INTRODUCTION

1.1 SOLE PROPRIETORSHIP:

A sole proprietorship, also known as the sole trader, individual entrepreneurship or
proprietorship, is a type of enterprise that is owned and run by one person and in which there is
no legal distinction between the owner and the business entity. A sole trader does not necessarily
work ‘alone’—it is possible for the sole trader to employ other people.
The sole trader receives all profits (subject to taxation specific to the business) and has unlimited
responsibility for all losses and debts. Every asset of the business is owned by the proprietor and
all debts of the business are the proprietor’s. It is a “sole” proprietorship in contrast with
partnerships.
Sole Proprietorship in simple words is a one-man business organization. It is the type of entity
that is fully owned and managed by one natural person (not a legal person/entity) known as the
sole proprietor. The business and the man are the same, it does not have a separate legal entity.
Registration of a business name for a sole proprietor is generally uncomplicated unless it
involves the selection of a name that is fictitious, or “assumed”. The business owner is required
to register with the appropriate local authorities, who will determine that the name submitted is
not duplicated by another business entity.
Furthermore, the business owner must complete a form submitted to the governing authority to
acquire title as a “DBA” or “doing business as”. The authority in some US states is the Secretary
of State.
The license for a sole proprietary business entitles the owner to hire employees and enlist the
services of independent consultants. Although an employee or consultant may be requested by
the owner to complete a specific project or participate in the company’s decision-making
process, their contribution to the project or decision is considered a recommendation under the
law. Under the legal doctrine Respondeat superior (Latin: “let the master answer”), the legal
liability for any business decision arising from such a contribution remains upon the owner and
cannot be renounced or apportioned.
This is transposed by the unlimited liability attached to a sole proprietary business. The owner
carries the financial responsibility for all debts and/or losses suffered by the business, to the
extent of using personal or other assets to discharge any outstanding liabilities. The owner is
exclusively liable for all business activities conducted by the sole proprietorship and accordingly,
entitled to full control and all earnings associated with it. The general aspect according to the
general business law is that this type of business owner does not embody a “legal entity”
Furthermore, any attempted and unreliable distinctions of the business do not change the
classification under this title.
Becoming a sole trader is relatively simple compared to other business structures. It can rapidly
enable a business to begin trading; the requirements for record keeping are far more
straightforward than other business structures. Sole traders make all operational decisions and
are solely responsible for raising business finance. They can invest their own capital into the
business, or may be able to access business loans and/or overdrafts. Unlike limited companies or
partnerships, it is not necessary to share decision making or the profits.
The simplicity of this structure also has its limitations. Unlike forming a limited company, it
lacks a clear distinction between personal and business income from the perspective of the tax
authorities. The business owner is personally liable for income tax and National Insurance
contributions due for the business profits in each given tax year. They are also personally liable
for any debts the business incurs. Business analysts may advise sole traders to form a limited
company in order to access greater levels of financing, for example for expansion plans. This can
limit their personal liability; business lenders may be more inclined to co-operate with a limited
company. It can also be the case that within certain industries it is easier to secure work if
presenting potential business partners with a limited company structure.
For the sole proprietor there are a variety of options in obtaining financial support for their
business, including loan facilities available from the U.S. Small Business Administration. The
loans are not originated by the SBA, but the administration does guarantee loans made by
various independent lending institutions. The primary loan facility for small businesses offered
by this agency is the 7(a) loan program, designed for general applications. Sole proprietors are
able to finance legitimate operating expenses; for example, working capital, furniture, leasehold
improvements and building renovations.
Many and varied private organizations and individuals seek opportunities to invest and fund a
business that may not qualify for traditional financing from institutions, such as banks. For the
sole proprietor, seeking to take advantage of this facility, there are various factors that must be
understood and adhered to regarding the loan application.
The Small Business Administration (SBA) advises there are traditionally two forms of financing:
debt and equity. For any small business owner seeking funding, they must consider the debt-to-
equity ratio of their enterprise.] This means the inter-action between the sum of dollars borrowed
and the financial dollars invested in the business. The mathematics are simple; greater the
finance invested by sole proprietors in their business; easier the obtaining of finance! The SBA
statistics show that the majority of small enterprises favor the use of limited equity financing; for
example, friends and relatives.
According to the SBA, there are various private organizations prepared to fund sole proprietor
business operations that do not qualify for traditional financing from banks. These private
investors can provide loans, credit lines, leasing facilities for equipment, or other forms of
capital, to sole proprietorship that have exhausted alternative financial resources. It is also
possible for these owners to obtain financing by way of business partners or others, with cash to
invest. Financial partners are frequently “silent” and although they do not participate in any
business related decisions, they generally receive a percentage of the profits, generated by the
business.
To assist sole proprietors, there are business grants available from the Federal Government or
private organizations, providing certain criteria are met. To qualify for Federal grants, small
businesses must comply with determined business size and income standards. For
considerationregarding various grant opportunities, sole proprietors may apply for a grant in their
capacity as an individual. Local governments and state economic development agencies,
frequently make grants available, for businesses that stimulate their local economies.
For any sole proprietor applying for a loan, before starting the loan procedure, it is essential their
personal and business credit history is in order and up-to-date. A personal credit report should be
obtained from a credit bureau; for example, Trans-Union, Equifax or Experian. This action
should be initiated by a business owner well before starting the borrowing process.
The Small Business Administration specifies that all credit reports received from any source
should be carefully reviewed to ensure that all relevant personal information is correct. Other
content in the report should also be examined particularly that related to the past credit obtained,
from sources such as, credit cards, mortgages, student loans, as well as details pertaining to how
the credit was repaid.
A business that legally has no separate existence from its owner. The sole proprietorship is the
simplest business form under which one can operate a business. The sole proprietorship is not a
legal entity. It simply refers to a person who owns the business and is personally responsible for
its debts.
There is no government registration needed in order to start a sole proprietorship business in
India. You don’t have to go to an online registration portal and fill up a form or submit any
documents. However, you do need to open a current account with a bank in the name of the
business.
Certificate/license issued by the Municipal authorities under Shop & Establishment Act Sales
and income tax returns CST/VAT certificate.
Certificate/registration document issued by Sales Tax/Service Tax/Professional Tax authorities
License issued by the Registering authority like Certificate of Practice issued by Institute of
Chartered Accountants of India, Institute of Cost Accountants of India, Institute of Company
Secretaries of India, Indian Medical Council, Food and Drug Control Authorities,
Registration/licensing document issued in the name of the proprietary concern by the Central
Government or State Government Authority/ Department, etc.
Banks may also accept IEC (Importer Exporter Code) issued to the proprietary concern by the
office of DGFT as an identity document for opening of the bank account etc.
The complete Income Tax return (not just the acknowledgement) in the name of the sole
proprietor where the firm’s income is reflected, duly authenticated/ acknowledged by the Income
Tax Authorities.
Utility bills such as electricity, water, and landline telephone bills in the name of the proprietary
concern.
The sole proprietorship is both the simplest and most common type of business operating in the
United States today. Most businesses that are owned and operated by one person take this form;
in fact, small business owners who have sole ownership of their enterprises are automatically
categorized under this business type if they do not take steps to legally establish themselves as
another type of business. The essential feature of a sole proprietorship is that the law makes no
distinction between the person, the sole proprietor, and the business.
Virtually all of the legal and tax consequences associated with sole proprietorships flow from
this basic fact.
Sole proprietors enjoy a great deal of independence and autonomy. The sole proprietor makes all
the decisions. As a sole proprietor, you alone can decide what to sell and how to sell it, when to
expand and when to pull back, when to look for financing, when to buy new equipment, when
and how long to work, and when to take the day off. In some instances, sole proprietorships can
benefit enormously as a result of this streamlined management structure. An entrepreneur who
keeps abreast of business trends, community events, and other factors that can impact on a
company’s fortunes may, in some cases, be able to adjust to changing business realities far more
quickly than a partnership or corporation, where multiple owners and/or managers need to reach
agreement on appropriate responses to changes in their business environment.
Figuring taxes is fairly straightforward. Unlike other business types, sole proprietorships do not
have to file separate income tax returns. In addition, FICA (Federal Insurance Contributions Act)
taxes for such businesses are less than they are for partnerships or other legal operating forms.
Accounting is a relatively simple affair, although small business experts encourage the owners of
even the most modest business ventures to establish separate bank accounts and record keeping
practices for their enterprise.
Business operations, too, are generally simpler in a sole proprietorship. Other forms of business
often have to contend with more cumbersome or time-consuming regulatory requirements in
conducting or reporting on their operations.
Start-up costs are often modest. This is due in part to the fact that entrepreneurs who intend to
establish sole proprietorships do not need to secure the services of an attorney to prepare
documents required by state or federal agencies, since none are needed.
Business losses can be used to offset other income on personal tax returns. Conversely, business
profits do not have to be shared with any other owners.
Sole proprietors are not forbidden from securing and building a work force. Indeed, many
businesses that qualify as sole proprietorships (delicatessens, landscaping firms, canoe liveries,
flower shops, etc.) have employees.
The sole proprietorship is both the simplest and most common type of business operating in the
United States today. Most businesses that are owned and operated by one person take this form;
in fact, small business owners who have sole ownership of their enterprises are automatically
categorized under this business type if they do not take steps to legally establish themselves as
another type of business. The essential feature of a sole proprietorship is that the law makes no
distinction between the person, the sole proprietor, and the business.
Virtually all of the legal and tax consequences associated with sole proprietorships flow from
this basic fact
One of the reasons entrepreneurs prefer sole proprietorship over other business structures is not
having to be accountable to any boss or supervisor since he or she is the owner of the company.
This means that the entrepreneur himself is the one at the helm of the business and decisions are
made solely by him. There is no need to wait for a go-signal from other people to implement new
rules and regulations. This privilege can prove to be useful during emergencies and decisions are
needed right away.
Sole proprietorship ranges from having no employees and up to a number of employees which is
easier to deal with in terms of expenses, taxes and compensation. Costs of opening a business
with this structure do not require costly legal expenses as well as corporate taxes. Moreover, if
the business only has few employees, health care insurance coverage is not really an obligation
of the business owner. As for bonuses and incentives, there will be lesser people to pay.
One of the perks of sole proprietorship is that the owner can keep all the profits to himself unlike
if he is on a partnership with another individual or if he has a corporation with investors where
profits will be divided among themselves.
Business owners who are sole proprietors can make quick decisions as well as have complete
control on how to manage the business. This can be beneficial to the entrepreneur since the
owner does not have to discuss issues with business partners and will be able to handle
complicated problems without someone else disagreeing or debating his proposed solutions.
Also, if wrong decisions are made, the sole proprietor only has himself to blame.
Apart from the lesser requirements in forming sole proprietorship like applying for the name of
the business and opening a bank account with only one signatory, changing business structures is
also less complicated in sole proprietorship. If the owner decides to incorporate the business or
change it into a partnership, he or she can easily decide to do so, without having to consult with
other signatories and co-owners. And if after some time the owner decides to apply for business
closure or stop operations, documents required and the process are lesser and simpler.
A proprietor will have complete control of the entire business, this will facilitate quick decisions
and freedom to do business according to their wishes
Law does not require a proprietorship to publish its financial accounts or any other such
documents to any members of the public. This allows the business a great deal of confidentiality
which is sometimes important in the business world
The owner derives maximum incentive from the business. He does not have to share any of his
profits. So the work he puts into the business is completely reciprocated in incentives
Being your own boss is a great sense of satisfaction and achievement. You are answerable only
to yourself and it is a great boost to your self-worth as well
A sole proprietorship does not have a separate law to govern it. So there are not many special
rules and regulations to follow. It does not require incorporation or registration of any kind. In
most cases, only a license is required to carry out the desired business.

And just like in its formation, there is hardly any legal process involved in its closure. Overall it
allows for ease of doing business with minimum hassles.
Since there is no separation between the owner and the business, the liability of the owner is also
unlimited. So if the business is unable to meet its own liabilities, it will fall upon the proprietor to
pay them. All of his personal assets (like his car, house, other properties etc) may have to be sold
to meet the liabilities of the business.
The owner is the only risk bearer in a sole proprietorship. Since he is the only one financially
invested in the company, he must also bear all the risk. If the business fails or suffers losses he
will be the one affected.
However, he also enjoys all the profits from the business. He does not have to share his profits
with any other stakeholders since there are none. So he must bear the full risk in exchange for
enjoying full profits.
In legal terms, the business and the owner are one and the same. No separate legal identity will
be bestowed upon the sole proprietorship. So the owner will be responsible for all the activities
and transactions of the business.
Just as we saw above the business and the owner have one identity. So a sole proprietorship is
entirely dependent on its owner. The death, retirement, bankruptcy. Insanity, imprisonment etc
will have an effect on the sole proprietorship. In most of such cases, the proprietorship will cease
to exist and the business will come to an end.
The sole proprietorship is the simplest business form under which one can operate a business.
The sole proprietorship is not a legal entity. It simply refers to a person who owns the business
and is personally responsible for its debts. A sole proprietorship can operate under the name of
its owner or it can do business under a fictitious name, such as Nancy’s Nail Salon. The fictitious
name is simply a trade name—it does not create a legal entity separate from the sole proprietor
owner.
The sole proprietorship is a popular business form due to its simplicity, ease of setup, and
nominal cost. A sole proprietor need only register his or her name and secure local licenses, and
the sole proprietor is ready for business. A distinct disadvantage, however, is that the owner of a
sole proprietorship remains personally liable for all the business’s debts. So, if a sole proprietor
business runs into financial trouble, creditors can bring lawsuits against the business owner. If
such suits are successful, the owner will have to pay the business debts with his or her own
money.
The owner of a sole proprietorship typically signs contracts in his or her own name, because the
sole proprietorship has no separate identity under the law. The sole proprietor owner will
typically have customers write checks in the owner’s name, even if the business uses a fictitious
name. Sole proprietor owners can, and often do, commingle personal and business property and
funds, something that partnerships, LLCs and corporations cannot do. Sole proprietorships often
have their bank accounts in the name of the owner. Sole proprietors need not observe formalities
such as voting and meetings associated with the more complex business forms. Sole
proprietorships can bring lawsuits (and can be sued) using the name of the sole proprietor owner.
Many businesses begin as sole proprietorships and graduate to more complex business forms as
the business develops.
Because a sole proprietorship is indistinguishable from its owner, sole proprietorship taxation is
quite simple. The income earned by a sole proprietorship is income earned by its owner. A sole
proprietor reports the sole proprietorship income and/or losses and expenses by filling out and
filing a Schedule C, along with the standard Form 1040. Your profits and losses are first
recorded on a tax form called Schedule C, which is filed along with your 1040. Then the
“bottom-line amount” from Schedule C is transferred to your personal tax return. This aspect is
attractive because business losses you suffer may offset income earned from other sources.
As a sole proprietor, you must also file a Schedule SE with Form 1040. You use Schedule SE to
calculate how much self-employment tax you owe. You need not pay unemployment tax on
yourself, although you must pay unemployment tax on any employees of the business. Of course,
you won’t enjoy unemployment benefits should the business suffer.
Sole proprietors are personally liable for all debts of a sole proprietorship business. Let’s
examine this more closely because the potential liability can be alarming. Assume that a sole
proprietor borrows money to operate but the business loses its major customer, goes out of
business, and is unable to repay the loan. The sole proprietor is liable for the amount of the loan,
which can potentially consume all her personal assets.
Imagine an even worse scenario: The sole proprietor (or even one her employees) is involved in
a business-related accident in which someone is injured or killed. The resulting negligence case
can be brought against the sole proprietor owner and against her personal assets, such as her
bank account, her retirement accounts, and even her home.
Consider the preceding paragraphs carefully before selecting a sole proprietorship as your
business form. Accidents do happen, and businesses go out of business all the time. Any sole
proprietorship that suffers such an unfortunate circumstance is likely to quickly become a
nightmare for its owner.
If a sole proprietor is wronged by another party, he can bring a lawsuit in his own name.
Conversely, if a corporation or LLC is wronged by another party, the entity must bring its claim
under the name of the company.

1.2 ADVANTAGES OF SOLE PROPRIETORSHIP :

• Owners can establish a sole proprietorship instantly, easily and inexpensively.
• Sole proprietorships carry little, if any, ongoing formalities.
• A sole proprietor need not pay unemployment tax on himself or herself (although he or
she must pay unemployment tax on employees).
• Owners may freely mix business or personal assets.

1.3 DISADVANTAGES OF SOLE PROPRIETORSHIP :

• Owners are subject to unlimited personal liability for the debts, losses and liabilities of
the business.
• Owners cannot raise capital by selling an interest in the business.
• Sole proprietorships rarely survive the death or incapacity of their owners and so do not
retain value.
• One of the great features of a sole proprietorship is the simplicity of formation. Little
more than buying and selling goods or services is needed. In fact, no formal filing or
event is required to form a sole proprietorship; it is a status that arises automatically from
one’s business activity.
• A sole proprietorship also referred to as a sole trader or a proprietorship, is an
unincorporated business that has just one owner who pays personal income tax on profits
earned from the business.
A sole proprietorship is the easiest type of business to establish or take apart, due to a lack of
government regulation. As such, these types of businesses are very popular among sole owners
of businesses, individual self-contractors, and consultants. Many sole proprietors do business
under their own names because creating a separate business or trade name isn’t necessary.
A sole proprietorship is very different from corporations and limited partnerships, in that no
separate legal entity is created. As a result, the business owner of a sole proprietorship is not
exempt from liabilities incurred by the entity.
For example, the debts of the sole proprietorship are also the debts of the owner. However, the
profits of the sole proprietorship are also the profits of the owner, as all profits flow directly to
the business’s owner.
One of the main benefits of the sole proprietorship is the pass-through tax advantage, mentioned
previously. The disadvantage of a sole proprietorship is in getting capital funding, specifically
through established channels, such as issuing equity and obtaining bank loans or lines of credit.
It begins as an entity with unlimited liability. As a business grows, it often transitions to a limited
liability company (LLC) or an S-corporation.
A sole proprietorship is very different from corporations and limited partnerships, in that no
separate legal entity is created. As a result, the business owner of a sole proprietorship is not
exempt from liabilities incurred by the entity.
For example, the debts of the sole proprietorship are also the debts of the owner. However, the
profits of the sole proprietorship are also the profits of the owner, as all profits flow directly to
the business’s owner.
One of the main benefits of the sole proprietorship is the pass-through tax advantage, mentioned
previously. The disadvantage of a sole proprietorship is in getting capital funding, specifically
through established channels, such as issuing equity and obtaining bank loans or lines of credit.
It begins as an entity with unlimited liability. As a business grows, it often transitions to a limited
liability company (LLC) or an S-corporation.

A sole proprietorship is the simplest business structure in which one person is the owner and
operator of the business. This sole proprietor is responsible for all aspects of the business and
reaps all profits of the business.
Because there is no legal distinction between the business and the owner/operator, the
owner/operator is in direct control of the proprietorship’s activities and is accountable for all its
debts.
Other common business models include varying partnerships, corporations, limited liability
companies (LLC), and others. A big difference between sole proprietorships and these other
options is that the sole proprietor is solely in charge and responsible.
In partnerships, there are other persons sharing the responsibilities of the business. Another big
difference between sole proprietorships and corporations or LLCs is that the financial liability
lies with the LLC and not the individuals operating the LLC.
For example, if the LLC cannot pay its debts, the operators’ personal assets have protection
against debt collection for the LLC’s unpaid debts.
Beginning a sole proprietorship is easy. Unlike other business structures, starting a sole
proprietorship requires less paperwork and time to create a legal sole proprietorship.
It is cheap to start a sole proprietorship. Where other business structures have increased fees and
filings to open for business, sole proprietorships tend to be affordable models to start and
maintain.
There are some tax benefits for a sole proprietorship. Instead of the business having to file its
own tax return, sole proprietors claim businesses gains and losses on their own individual tax
return. Also, the sole proprietorship is taxed using individual income tax rates rather than
corporate making it simpler and cheaper to comply with your tax obligations.
Sole proprietors can employ others and grow their business. Sole proprietorships can hire others
and enjoy the tax benefits from doing so. Additionally, spouses of the owner can work for the
sole proprietorship without being declared as an employee.
Owners have complete and direct control over all decision making. Because the owner is the
business, the owner makes all decisions for the business rather than sharing power with a partner
or corporate board. This allows owners the freedom to drive the business in the direction they
desire.
Owners are fully liable. If business debts become overwhelming, the individual owner’s finances
will be impacted. When a sole proprietorship fails to pay its debts, the owner’s home, savings,
and other individual assets can be taken to satisfy those debts.
Self-employment taxes apply to sole proprietorships. Owners must pay self-employment taxes on
the business income.
Business continuity ends with the death or departure of the owner. Because the owner and the
sole proprietorship are one, if the owner dies or becomes incapacitated then the business dies
with them and the money and assets of the business become part of the individual’s estate. The
assets and money are subjected to inheritance taxes and can have a great impact on employees of
the sole proprietorship.
Raising capital is difficult. Initial funds of the business are generated by the owner and raising
funds for the business can be hard since they cannot issue stocks or other investment income.
Loans may also be difficult if the owner does not have enough credit to secure additional money.
Proprietary concerns can be formed easily and quickly. Very few legal formalities need to be
fulfilled. There is no need to go for any registration or enter into an agreement with someone.
One can form it and dissolve it quickly.
Proprietary ventures give a kick in the belly. You can burn the candle of energies and make
money. You take the risk and get rewarded. The effort-reward relationship often excites people
to chase creative ideas and turn them into successful ventures.
The owner has full control over everything. He is answerable to no one else. He decides
everything in the best interests of the business. Right or wrong, he takes charge of the situation.
The venture is a mirror image of the owner’s confidence in himself. The business acts like an
energy booster and keeps the owner on his toes always.
It is the freedom to think and act independently that gives the maximum amount of satisfaction to
the owner.
Proprietors can take quick steps and dispose of things promptly. If they have to consult someone,
the opportunities may not wait for long. If a quick decision to grant a fat discount to a loyal
customer brings them additional business, they can do so on the spot.
The owner can put together his sources to the best use. He can take steps to eliminate wastage of
all kinds. He can control the cost of running the show. He can get the maximum benefit out of
every piece of operation. The threat of losing his grip over his business and being pushed to a
corner by rivals keeps him vigilant, alert and cautious.
The owner can bring his skills, knowledge, and expertise to the table. He can play with his ideas
and get them going. He can convert his dreams into concrete realities. He can make things
happen by using his brilliance to good advantage. Everything that an owner does is something
unique, special, and convincingly real. With that extra effort a small business owner can build a
fortune for himself.
The owner can cut everything according to the cloth available. If there is demand, he can pump
more money into the venture. He can increase the scale and reach. If the demand is sluggish, he
can carefully monitor everything, and order only those products that are in demand by the end
users. He can run the show in sync with changing customers’ tastes and preferences.
The proprietor need not place all his cards on the table. Nor is he required to share any
information with anyone else. The story of his journey from rags to riches need not be made
public if he chooses to hide it from public scrutiny. The success mantra can take him to places.
And he can use it profitably wherever he wants to.

Small proprietary concerns offer exciting as well as rewarding opportunities for people who are
not willing to work for others. Such people can dream big, give imagination to their thoughts and
start their ventures by exploiting some gaps in the market to their benefit. Small businesses make
people self-reliant. Once the owners taste success, they are able to offer job opportunities to
others.
Local resources are put to the best advantage. If many such units sprout up in select locations,
the local economy also develops rapidly. The locals get the best of both worlds, by getting
quality products at affordable prices in proximity. Local youth are also gainfully employed.
Wealth does not stay concentrated in a few hands.
 Society as a whole benefits greatly from the entrepreneurial ventures of various kinds.
As if has been pointed out no legal-formalities are necessary for setting up the business in this
form. It is, thus, the most easily formed of all the forms of business organization. Any person
enjoying the capacity to contract can set up such an organization. As Lundz puts it, “Becoming a
proprietor is as simple as buying newspapers for 3 cents and selling them on a street corner for a
nickel (5 cents).”
Dissolution, termination, or sale of the business is equally simple in the case of a sole-
proprietorship. There are no legal formalities in this regard and all that the businessman has to
arrange for is the satisfaction of creditors’ claims. A sole proprietor may wash his hands off his
business selling his interest to another person or association of persons.
The direct relationship between effort and reward serves as a powerful incentive to the proprietor
to manage the concern efficiently. It encourages and induces him to put forth his best in the
management of this business. He knows that any lapse on his part will mean loss of profits.
The proprietor himself has to decide everything and, therefore, he will not take a decision by
which the various interests of the firm clash. Moreover, he knows his employees personally and,
therefore, he is able to ensure that they work as a team.
An individual entrepreneur need not consult others while deciding the affairs of his concern. This
makes for quicker decisions by which he can take advantage of the opportunities of gain arising
from time to time.
If any change in business is called for, he does not have to consult anyone and, therefore, he will
be able to make the change without delay. This gives flexibility to this type of organisation. A
good number of giant-size concerns fail on account of their inability to change their policies
promptly to meet a change in the situation.
If an individual proprietor has enough resources (cash or investments) outside the firm, he will
enjoy a favourable credit standing among suppliers and other firms and institutions dealing with
him. The creditor will look forward to satisfaction of their claims out of this personal wealth.
Thus, his private resources will serve as a kind of second line of defense beyond the firm’s assets
as security for debts.

Sole proprietorship is the least regulated form of business organization. “Restrictive laws on sole
proprietorship generally are limited to those affecting all citizens as individuals.” Of course, a
sole proprietorship does have to comply with tax and labour laws like other establishments but
there is no legal regulation of formation or dissolution for this form of organization.
It is source of independent way of living. As the sole proprietorship requires one man to be all-
in-all of his business, it is very suitable for those members of the community who want to be
self-dependent and utilize their capacity to the maximum.
It is a generator of social virtues. Since the sole-proprietor has to be independent, he has to face
all sorts of problems himself. Constant fighting with these problems inculcates in him the social
virtues like initiative, firm will, independent thinking and so on enabling him to command a
respectable life in the society.
It avoids concentration of economic power. Since sole-proprietorship business is done relatively
on a small scale, large number of people can share the business ownership, thus, avoiding
concentration of economic power in a few hands through giant units.
Sole proprietor enjoys complete freedom in taking the decisions. It facilitates quick decision-
making as there is no need to consult others. He takes all major or minor decisions. Timely
decisions help him to take advantage of market opportunities as and when they arise.
The maintenance of full secrecy is very important for the success of a business. As proprietor has
the sole decision making authority, it enables him to retain all information related to business
operations confidential.
 Sole trader is also not bound by law to publish firm’s accounts.
The proprietor enjoys all the profits of the business as there is no one else to share earnings of
the business. Direct relationship between efforts and reward encourages him to work hard and
earn more.
Sole proprietorship provides personal satisfaction to people who want to be self-employed. As
the proprietor is himself responsible for the success of business, it not only provides him
satisfaction but also creates a sense of accomplishment and confidence.
Sole proprietorship can be easily started or dissolved at any time with minimum legal
formalities. No separate law governs sole proprietorship. So, it can be started or closed down
easily at the will of the proprietor.
Sole proprietor enjoys complete freedom in taking the decisions. It facilitates quick decision-
making as there is no need to consult others. He takes all major or minor decisions. Timely
decisions help him to take advantage of market opportunities as and when they arise.
The maintenance of full secrecy is very important for the success of a business. As proprietor has
the sole decision making authority, it enables him to retain all information related to business
operations confidential.

 Sole trader is also not bound by law to publish firm’s accounts.

The proprietor enjoys all the profits of the business as there is no one else to share earnings of
the business. Direct relationship between efforts and reward encourages him to work hard and
earn more.
Sole proprietorship provides personal satisfaction to people who want to be self-employed. As
the proprietor is himself responsible for the success of business, it not only provides him
satisfaction but also creates a sense of accomplishment and confidence.
Sole proprietorship can be easily started or dissolved at any time with minimum legal
formalities. No separate law governs sole proprietorship. So, it can be started or closed down
easily at the will of the proprietor.
The establishment of sole proprietary concern is very easy and simple. There is no need for
detailed legal formalities to form such a concern.
It is very easy to carry on business operations. The day to day working is free from legal
interference. There is flexibility in operations. Since the sole trader takes all decisions, he can
steer his business any which way he wishes. He can choose to enter any new business he wishes
to. He can similarly decide to close down any business division. He can quickly adapt to any
change in circumstances, as he need not consult or convince anybody.
The sole proprietor is in touch with the day to day operations of the business. He is the sole
decision making authority. Hence, if there is any situation requiring an immediate decision, it is
possible for the proprietor take any decision which he thinks is appropriate. The decision is
followed up with prompt action. This advantage is not there in case of any other form of
organization.
The sole proprietor takes all the decisions of the business. The scale of business is usually small.
The group of people with whom the proprietor needs to deal with, be it customers, suppliers or
employees, is usually small. Since the proprietor is completely involved in all business activities,
he is in complete control of his business. He knows exactly what is to be done and how to do it.
All the activities undertaken by the business are under the close personal supervision of the
proprietor. The proprietor will not incur any expenses unless it is necessary. He will also ensure
that any expenses that are necessary to be incurred are kept to the minimum.
The size of the business is also small. The sole trader is the owner, manager and controller of the
business. He does may or may not appoint specialists for various functions. The staff mostly
consists of family members and acquaintances. Thus, expenses of operation are minimal.
The proprietary form of business provides the best incentive to improve performance. All the
profits resulting from efforts made by the proprietor are enjoyed by him. Moreover, laxity or
indifference on his part will result in losses, which he alone has to suffer. Thus, the proprietor
will put in his best efforts.
Since the proprietor is in touch with the operations and his staff, he is able to understand the
difficulties faced by employees, not only at the time of work, but also at a personal level. If he
can solve their problems, he will have a strong, motivated, result oriented team.
The sole proprietor is always in direct contact with his customers. He is therefore able to
understand their changing needs better. He can ascertain their taste, attitude and habits and
understand their difficulties. He is able to react faster to the changing situation.
The sole proprietor deals with his customers suppliers directly. He is therefore able to know any
new product or technology that has come into the market. He is able to react faster to the
changing situation. His personal relations with the suppliers enable him to better terms such as
increased credit period, lower prices, etc.
Success in business stems out of specific advantages. Such advantages are a result of superior
knowledge, which may be technical know-how, cheapest sources of supply of material, an
efficient process of manufacture, etc.
This knowledge is developed by the proprietor by his tact, foresight and skill. This knowledge
need not be shared by the proprietor with others.
Sole proprietor has unlimited liability. Thus, he is likely to raise more funds as the amount
available as security to the lender extends not only to business assets, but also personal assets.
Moreover, he will not be able to borrow more than what he can repay, as financial position is
monitored by the lenders. Thus, the borrowing pattern of a sole proprietor is a judicious mix of
caution and aggression.
A business is initially started for survival and growth. However, as the proprietor grows older, he
hands over the business to his sons/daughters. Thus, the next generation takes a lot of interest
and learns the various aspects of the business. The businessman thus ensures that the next
generation in his family also has a genuine source of earning their livelihood. As a result, the
business is also assured of a long life.
Sole proprietary form of organization provides an alternative for capable people who are not able
to get employment. It serves a useful social purpose as lack of employment can result in of
frustration among such people, leading to crime. Proprietary concerns provide opportunities for
employment to other people, there by serving the society.
The virtue of proprietary form of business is that the proprietor is totally independent. He enjoys
total freedom on all business matters. It is eminently suitable for people who wish to be self-
sufficient.
Sole proprietorship inculcates in a person the ability to analyze and face difficult situations. It
improves self-confidence and self-reliance of the owner. It encourages initiative and
innovativeness. It improves his communication and presentation skills. Thus, it leads to over all
personality development.

Sole proprietary concerns can be started in a small way. Thus, even people with limited
resources can start a small venture of their own. Business need not be started by only large
industrial groups. Thus, there is diffusion of ownership and prevention of concentration of
wealth.
The proprietor can decide to close down his business at any time. He does not have to go through
lengthy legal procedures or obtain approvals. Thus, proprietary form of business is ideal for
experimenting with new ideas. If ideas fail, business can be shut down and losses can be
minimized.
A sole proprietorship is the most common form of business organization in the U.S. and includes
over 23 million people. This type of business represents 73 percent of all businesses in the U.S.
today.
A sole proprietor business is the easiest business type to start and operate. You don’t need to
formally register your business with your state, unlike corporations or LLCs. Some
disadvantages exist with a sole proprietor business, as well.
One question that’s often asked is the difference between a sole proprietor and an independent
contractor. A small business can be both a sole proprietor for the purpose of paying income taxes
and an independent contractor for the purpose of getting paid by companies for work.
If you are a sole proprietor or you have considered starting a sole proprietorship, find out more
about this business form. T’s easy to form, with no requirement to register with a state.
It’s easiest to run, with no regulations about having a board of directors, meeting minutes, or
annual meetings.
 The owner is in complete control of the business, not having to answer to anyone.
The owner gets all of the profits of the business, but of course he or she must also take all of the
losses.
The benefits of starting your business as a sole proprietorship may or may not outweigh the
disadvantages, depending upon your own situation.
The biggest disadvantage of the sole proprietorship is that your personal legal and financial
situation and the business financial and legal situation are one and the same.
This means that a business bankruptcy would affect your personal finances. It also means that
any lawsuits against the business can affect you as an individual, or your family.
Another disadvantage of this business type is that you must pay income taxes and self-
employment tax (Social Security and Medicare tax) on the entire income of the business. If your
business is profitable, that can be a big bill to pay.

 A sole proprietorship is the easiest form of business to start. All a sole

proprietor business owner needs for a startup is:

• A business name
• A business checking account
• A website, and some customers
You don’t need to register your business with your state, but you will need to take care of
some other legal matters. You’ll need to
• Get a business license with your locality
• Apply to the state for sales tax permits
• Get any specific licenses and permits, depending on the type of business you are starting.
For example, a food business will need a health permit.
• A sole proprietorship pays income taxes by completing a Schedule C and including this
income on the owner’s personal tax return.
• Schedule C lists all the income of your business and then all of the business expenses you
want to deduct. You can include home business expenses if you operate your business
from your home, and car expenses if you drive for business purposes.
• The total net income from Schedule C is then entered on Line 12 of your Form 1040,
along with income from other sources.
• You’ll calculate self-employment tax based on the net income of your business and add
this after the income tax is calculated. The income tax and self-employment tax are
totaled to arrive at your total tax liability.

The terms “sole proprietor” and “independent contractor” may be confusing. A small
business can be both a sole proprietor and an independent contractor.
The sole proprietor designation is a high-level description used for federal income tax purposes.
It means that a sole proprietor pays income taxes on revenue shown on Schedule C, on their
individual tax return, as detailed above. For example, a sole proprietor may produce and sell a
product to customers and pay taxes on the sales proceeds.
An independent contractor works for someone else and receives a 1099-MISC form (similar to a
W-2 form for employees) showing income for the year. They will show their income from the
1099 form as self-employment income on Schedule C.
1. According to L. H. Haney, “The individual entrepreneur ship is the form of business
organisation at the head of which stands an individual as the one who is responsible,
who directs its operations and who alone runs the risk of failure.”

2. According to James Stephenson, “A sole trader is a person who carries on business

exclusively by and for himself.”

3. According to Dr. John A. Shubin, “Under the sole proprietorship form of ownership a
single individual organises, has title to, and operates the business in his own name.

4. According to James Lundy, “The proprietorship is an informal type of business owned

by one person.”
 5. According to Kimball and Kimball, “The individual proprietor is the supreme judge of
all matters pertaining to his business, subject only to the general laws of the land and to
such special legislation as may affect his particular business.”

6. According to S. R. Daver, “A sole trader is a person who carries on business on his.

Own that is, without the assistance of a partner. He brings in his own capital and uses all
his labour. He also gets himself assisted by other to whom he pays a salary by way of
remuneration.”

1.4 CHARACTERISTICS OF SOLE

PROPRIETORSHIP:
The following are the essential characteristics of
sole proprietorship:

1. Sole Proprietorship:
The individual carries on business exclusively by and for himself. He invests his own capital and
controls the whole business. He bears all the risks and is the master of all the profits.
2. Free from Legal Formalities:
A sole trade business is not expected to meet any legal requirement. A sole trader may engage in
any business unless licence is required under law. Suppose, he wants to open a cloth shop or a
grocery store, he will do it but if he wants to open a restaurant he will have to obtain a licence
before opening the same.
3. Unlimited Liability:
In sole trade business, liability is unlimited. The proprietor bears all the losses arising from the
business. His private property is also liable for the business obligations.
4. Sole Management:
The sole trader manages the whole business himself. He prepares the plans and executes them
under his own supervision. He is not required to consult anyone else in taking decisions. The
ultimate authority to manage and control rests with the proprietor.
5. Secrecy:
It is also an important characteristic of sole proprietorship. All the decisions are taken by the
proprietor himself. He is in a position to keep his affairs to himself and maintain perfect secrecy
in all matters.
 6. Freedom regarding Selection of Business:
A sole trader is at freedom to select any business of his choice. He has not to depend on others.
7. Proprietor and Proprietorship are One:
It is a fact that the sole trader and his business are not separate entities. Loss in the business is his
loss. Liabilities in the business are his liabilities. He bears all the risks and is the master of all the
profits.

1.5 SCOPE AND PROSPECTS OF SOLE PROPRIETORSHIP :

In the modern business world the scope of sole proprietorship is very limited. The sole
proprietorship form of organization is more suitable in following cases:
1. The business in which small amount of capital is required.
2. Where the risk involved is not much.
3. Where the extent of liability is not more.
4. Where the size of business is small.
5. When the market for a product is limited only to a particular place, scale of business
operations will be small.
6. When personal contact with customers is required, sole proprietorship form of
organisation will be suitable.
7. If one man is big enough to manage everything.

When the scale of operations is small, then capital requirements will be less and sole
proprietorship is the most suitable form of organization.

“One-Man Control is the Best in the World, if One Man is Big Enough to Manage
Everything.”:
The sole proprietorship or one-man business is a form of organisation in which an individual
produces independently with his own capital, skill and intelligence and is entitled to receive all
profits and equally assumes all risks of ownership.
Despite its disadvantages and limitations, sole proprietorship form of organisation is very
popular.

 William R. Basset, in his book, The Organisation of Modern Business says that:
“The one-man control is the best in the world if that one man is big enough to manage
everything. But a business must be small indeed to permit one man actually to know and to
supervise everything. The danger is always present that he thinks he knows when really he does
not know and naturally there is no permanency in this kind of management if the one man is
away or ill, the business stops and of course when he dies, business vanishes or has to be re-
built.”
According to William R. Basset, one-man controlled business is the best provided that man is
able to manage all activities efficiently and effectively. The sole proprietorship is easy to form
and is also free from legal formalities. The sole proprietor can take prompt decisions to avail all
business opportunities.
In sole proprietorship being one man the owner of the business, the secrecy, economy, prompt
decision and direct contact with customers, etc. are found.
It becomes clear from the above discussion that one-man control is the best in the world provided
that man is able to manage all activities efficiently and effectively. In practice, the sole proprietor
has to face many difficulties which are obstruction in the smooth running of the business.

1.6 ADVANTAGES OF SOLE PROPRIETORSHIP :

The main advantages of sole trader ship are discussed as follows:
1. Ease in Formation:
Sole proprietorship is the only form of organization which is easy to form and simple to run. No
legal formalities are required to be faced by such as registration, etc. He may, however, obtain
license where required under government rules such as opening of restaurants.
2. Perfect Control:
As the sole proprietor is himself the master of the business he maintains a perfect control. He
takes his own decisions and is to face the consequence. As the employees are very few he
maintains personal contact with them and creates a team work. The golden rule of capitalism is
‘where the risk lies, control must lie’. There is no wastage because of his perfect control.
3. Flexibility in Operations:
As he is the sole master he is in a position to introduce any change he considers necessary.
Hence, there is a great deal of flexibility in the policy making of this type of organisation.
4. Direct Motivation:
The proprietor takes a personal interest in the business as all the profits are his own. He is keen
to run the business efficiently and economically because the success of business is his own
success and failure is his own failure. The direct relationship between the efforts and reward acts
as a great stimulus for working hard and making the enterprise successful.
5. Maintenance of Secrecy:
Secrecy, is of great importance for the success of a small business and being a sloe trader, he is
in a position to keep all his affairs to himself and maintain perfect secrecy in all matters.
 6. Prompt Decision:
As he himself is to consider the problem and to give decisions. He takes prompt decisions which
promote efficiency. Being the sole master, he takes prompt decision and makes advantage of the
opportunity. Since his decisions are not to be challenged by anyone, he does not hesitate to take
decisions.
7. Catering for Individual Tastes:
As a sole proprietor, he is in a position to have close contacts with his customers and can cater
for the customers’ tastes. This helps him to build goodwill which naturally results in the
flourishing of business. The individual owner flourishes in all enterprises where the personal
element is important.
8. Minimum Government Regulations:
The activities of the sole trader are regulated by government and law to the minimum extent. In
fact, his right and obligations are the same as of any other citizen, except that he is to pay
income- tax and sales tax, there is hardly any other interference of law in his affairs. The
formation and dissolution of the business is not subject to any law or regulation in this form of
organization.
9. Easy to Raise Finance:
A sole proprietor is able to create goodwill for his business. This helps him to establish his
creditworthiness in the market. And being his liability unlimited the creditors can have a claim
on his private property also. The creditors feel secure in extending credit to the sole proprietors.
THE GENERAL ADVANTAGES ARE GIVEN BELOW:
(i) Independent Way of Life:
This form of organization provides a way of life for those who take pride in ownership and
control of what they are masters. They are obviously of independent spirit and would not care to
serve under others. Such persons are in a position to utilise their capacity to full extent and enjoy
freedom of action. He is both the master and manager and this fact gives the greatest possible
satisfaction.
(ii) Generation of Social Values:
This form of organization affords a high degree of self-determination, the enjoyment of
purposeful work, the warmth of social contact, a well integrated family and respectable life. This
develops the qualities of self-reliance, responsibilities and initiative which are of great social
significance.
(iii) Diffusion of Business Ownership:
Under this form of organization, a very large number of people must own and manage vast
number of small business units. It makes for diffusion of business ownership as against
concentration of power in few hands offered by a joint stock company.
1.7 JIO (COMPANY PROFILE):

Jio is not just a telecom network, it is an entire ecosystem that allows

Indians to live the digital life to the fullest. This ecosystem consists of
powerful broadband networks, useful applications, best-in-class
services and smart devices distributed to every doorstep in India. Jio’s
media offerings include the most comprehensive libraries and
programs of recorded and live music, sports, live and catch up
television, movies and events. Jio is about creating connected intelligence for 6 billion global
minds to unleash the power of a young nation. We are all set to change the way people work,
play, learn and live.
Coverage:
Jio is committed to provide coverage across urban and major rural areas. Jio is aiming to cover
90% of India's population in the next 18-24 months.
Quality:
Jio will offer HD quality voice to its subscribers with instantaneous call connect capability.
Superior data experience will be offered to the subscribers, which includes fastest page
download, highest peak download speed in the industry, video streaming without buffering &
real time gaming experience.
Affordability:
The key idea is to make internet accessible and affordable to consumers in all parts of the
country. Jio will significantly up the quantity, quality and coverage of broadband internet while
lowering the cost to the user.
Jio will play a key role in the digital development of India – with applications for everything
from education to healthcare, security to financial services, technology to entertainment.
Shri. MukeshAmbani, Chairman, Reliance Industries Ltd. says, "Jio is about bringing people
together, safely and securely. It is about inspiring people to join a movement – the digital India
movement. Jio is about you and your family, friends, community and all Indians together in a
movement to embrace and win in the digital world."

1.8 HISTORY OF JIO:

In November 2019, when MukeshAmbani, Asia’s richest and the world’s fourth-richest person
and chairman and managing director of Reliance Industries Ltd (RIL), created Jio Platforms, a
wholly-owned subsidiary of his oil-to-telecom empire, he set in motion a plan that would drive
his company’s growth over the next decade.
Jio Platforms acquired Reliance’s telecom arm, JioInfocomm, and with that India’s largest
company by market capitalization metamorphosed its telecom venture into a digital company.
Simply put, Jio Platforms is Reliance’s digital arm that houses its telecom and digital offerings.
However, it is the linchpin for MukeshAmbani’s ambition to create a digital society, the key for
RIL to get a majority of its revenue from consumer businesses that currently contribute about
30%. This will help the group reduce its dependency on the oil business, which has been going
through turbulence due to macro-economic situations in the last few years.
At the center of Jio Platforms is JioInfocomm with its almost 400 million subscribers, which is
what makes the digital venture so valuable. The network connectivity is the basic foundation for
offering digital services to millions of Indians. Through its telecom arm, the company offers
wireless, home broadband, and enterprise broadband services.
“JioInfocomm is the bedrock of the entire Jio structure,” SanchitVirGogia, founder and chief
executive, Greyhound Research, told KrASIA. “Without JioInfocomm, Jio Platforms is nothing
but an empty drum without subscribers.”
According to JayanthKolla, founder and partner of Bengaluru based business consultancy firm
Convergence Catalyst, JioInfocomm strategically brings a huge customer base to Jio Platforms
and gives it a whole lot of data analysis on the usage pattern and behavior of these consumers.
This, in turn, he said, “acts as a tool for the company to change or impact the digital behavior of
consumers.”
Apart from connectivity services, Jio Platforms inherited tech capabilities that Reliance had
accumulated over the last few years. These include artificial intelligence, machine learning,
internet of things, cloud computing, blockchain, edge computing, computer vision, security
solutions, and mixed reality.
A network of about 20 startups that Reliance has acquired or invested in, also bring with them
cutting edge technologies that add to Jio Platforms’ eye-popping list of tech capabilities. These
tech startups are helping the company enhance and expand its core digital products and services,
as well as launch new tech products and platforms.
Lastly, Jio Platforms has an ecosystem of apps that provides digital services across segments
such as communication, video, music, gaming and entertainment, home solutions, security, and
health, among others.
The ultimate aim of Jio Platforms is to offer “anything and everything digital,” according to
Kolla.
“Be it broadband, mobile internet, TV, online retail, communication, or digital payments, they
have made it clear they want to be the digital player in every Indian’s life,” he said. “Every
mobile and consumer internet product from China to California, Jio may launch an India version
of all of them.”
Jio app ecosystem. Source: Reliance
There is already consensus building in the global tech community on the trend of ‘splinternet’–
where the internet is being broken into various geographical regions based on factors such as
politics, technology, commerce, and nationalism, among others. The theory argues the Indian
version of the internet is likely to be led by Reliance Jio. This essentially means the internet-
based consumer services are likely to be dominated by Reliance’s digital baby.
However, according to Gogia, Jio Platforms is not just a digital story, it is a “phygital story,” or
physical plus digital story, using technology to connect the offline and online retail experience.
“How the company can get more out of its underutilized offline assets such as Reliance Retail
(its retail arm) and other related investments, is what the story is all about,” he said.
MukeshAmbani’s ambitious e-commerce venture, Jiomart, is a prominent step toward achieving
that. Reliance is leveraging its humongous retail and wholesale outlet network in the country to
expand Jiomart and compete with Amazon and Flipkart.
Jio Platforms’ structure. Source: Reliance’s analysts’ presentation.
The long complicated history
That MukeshAmbani set up a telecom company because of his daughter IshaAmbani is a famous
story that has been told numerous times.
“The idea of Jio was first seeded by my daughter, Isha, in 2011,” MukeshAmbani told an
audience in London in March 2018 after receiving the Financial Times-ArcelorMittal award for
boldness in business.
Then a student at Yale, IshaAmbani was back home on vacation and was having a hard time
submitting her coursework because of poor internet connection. She told senior Ambani that “the
internet in our house sucks,” which prompted MukeshAmbani to set up a fast-speed, low-cost
internet five years later.
Be that as it may, MukeshAmbani’s telecom ambitions, in fact, go over a decade back. The
Reliance group first entered the telecom business with Reliance Infocomm in 2002, soon after
the death of its founder DhirubhaiAmbani. However, by then a cold war had broken out between
his sons, MukeshAmbani and Anil Ambani.
Three years later, unable to run the Reliance empire together, the brothers split up, ending a
long-standing public feud. It was their mother, KokilabenAmbani, who divided the business
between the two. While MukeshAmbani took reins of the exploration and production,
petrochemicals, and refineries and marketing under the group’s original name Reliance
Industries, Anil Ambani got Reliance Energy, Reliance Infocomm, and Reliance Capital, and
named his company Reliance-Anil DhirubhaiAmbani Group (R-Adag).
Read this: Making sense of Reliance-owned Jio Platforms’ fundraising spree
In January 2006, Ambani brothers signed a 10-year non-compete contract so as to avoid rubbing
each other the wrong way.
By 2008, the telecom arm of R-Adag, Reliance Communications, had emerged as the country’s
second-largest mobile operator. Anil Ambani was then working on a mega-deal between
Reliance Communications and South African telecom giant MTN that would have formed a
powerful global telecommunications firm spanning India and South Africa with nearly USD 70-
80 billion in value. But the talks between the two companies were called off after
MukeshAmbani interfered and challenged his brother’s right to sell his controlling shares to
MTN as a part of the deal. He claimed he had the first right of refusal as per the complex
arrangement brokered when the Reliance empire was split up.
To put an end to the dissent, in May 2010, the two brothers scrapped their non-compete
agreement, which gave MukeshAmbani the ticket to enter the telecom sector.
Two weeks later, RIL bought a 95% stake in Infotel Broadband Services, an unknown and the
only company to have won the auction of broadband spectrum for pan-India. Interestingly, the
USD 1-billion-deal was made public hours after the auction results were announced.
Unless these past events were a series of serendipitous coincidences, MukeshAmbani had been
planning his entry in the telecom sector all along, even before his daughter complained about the
poor connectivity.
In 2013, RIL renamed Infotel Broadband Services as Reliance JioInfocomm, which then became
the only company to have a pan-India broadband spectrum, which it later used to roll out 4G
services. To be sure, it took Reliance about six years to launch commercial mobile network
services. But once it commercially launched in September 2016, it took the market by storm.
Not just a telecom story
When MukeshAmbani unveiled Jio in 2016, he announced Jio’s data, voice and video call, and
the bouquet of Jio applications and content (including JioTV, JioCinema, and JioMusic, among
others) would be available for free till the year-end. Later, the offer was extended till March
2017.
Over the next three years, Reliance offered Jio services and 4G smartphones at dirt-cheap prices,
which helped it oust the incumbents and become the largest telecom operator with over 330
million subscribers in mid-2019.
In the meantime, the company was getting ready for the next phase of growth. To beef up its tech
capabilities, between July 2016 and August 2019, Reliance acquired stakes in 18 companies in
areas including artificial intelligence, media, entertainment, software simulation, logistics, and
music streaming.
To carve out JioInfocomm as a standalone digital connectivity platform, in March 2019,
Reliance demerged its tower and fiber infrastructure assets from its telecom arm. Later that year,
this new asset-light entity laid the foundation for Jio Platforms.
Thus, MukeshAmbani strategically transformed his telecom venture into a full-fledged digital
tech platform, which during an ongoing pandemic raised over USD 20 billion from global high-
profile investors including tech giants like Facebook and Google. In fact, unlike other Indian
telecom giants, Airtel and Vodafone-Idea, Reliance never considered Jio as just a telecom
venture.
Jio Platforms as an integrated tech platform; Source: Reliance’s analysts’ presentation
While launching Jio in 2016, MukeshAmbani called Reliance Jio as the group’s “digital services
initiative.”
“It is the difference in thinking. It is the same reason why AT&T and Verizon (US telecom
behemoths) have not become tech giants like Google and Facebook,” Kolla said. “The basic
thinking of consumer internet companies is how they can scale 10x or 100x, rather than 10-20%
incremental growth. And that is what telcos around the world lack.”
This is exactly what Jio had from the very beginning—the vision to scale up its services to a
billion Indians. And now it is also eyeing millions of enterprises, especially small merchants
across India.
But more importantly, experts believe, the confidence from institutional and retail investors that
Reliance enjoys, its presence across industries, and the ability to work with the government, is
what is going to take Jio Platforms long way, whose evolution has just begun.

1.9 Products and Services:

 Mobile broadband

The company launched its 4G broadband services throughout India in September 2016. It was
slated to release in December 2015 after some reports said that the company was waiting to
receive final permits from the government. Jio offers fourth-generation (4G) data and voice
services, along with peripheral services like instant messaging and streaming movies and music.

 JioFiber

In August 2018, Jio began to test a new triple play fiber to the home service known tentatively as
JioGigaFiber, including broadband internet with speeds ranging from 100 to 1000 Mbit/s, as well
as television and landline telephone services.

In August 2019, it was announced that the service would officially launch on 5 September 2019
as JioFiber, in honour of the company’s third anniversary. Jio also announced plans to offer
streaming of films still in theatres (“First Day First Show”) to eligible JioFiber subscribers.

In the year 2015, the company has a network of more than 250,000 km of fiber optic cables in
the country, over which it will be partnering with local cable operators to get broader
connectivity for its broadband services.

 LYF smartphones

June 2015, Jio entered into an agreement with domestic handset maker Intex to supply 4G
handsets capable of voice over LTE (VoLTE). However, in October 2015, Jio announced that it
would be launching its own mobile handset brand named LYF.
On 25 January 2016, the company launched its LYF smartphone series starting with Water 1,
through its chain of electronic retail outlets, Reliance Retail. Three more handset models have
been released so far, namely Water 2, Earth 1,and Flame 1.

 Jio phone

JioPhone is a line of feature phones marketed by Jio. The first model, released in August 2017
(with public pre-orders beginning 24 August 2017), was positioned as an “affordable” LTE-
compatible feature phone. It runs the KaiOS platform (derived from the defunct Firefox OS), and
includes a 2.4-inch display, a dual-core processor, 4 GB of internal storage, near-field
communication support, a suite of Jio-branded apps (including the voice assistant HelloJio), and
a Jio-branded application store. It also supports a “TV cable” accessory for output to an external
display.

In July 2018, the company unveiled the JioPhone 2, an updated model in a keyboard bar form
factor with a QWERTY keyboard and horizontal display. Jio also announced that Facebook,
WhatsApp, and YouTube apps would become available for the two phones.

 JionetWi-Fi

Prior to its pan-India launch of 4G data and telephony services, the firm has started providing
free Wi-Fi hotspot services in cities throughout India including Surat, Ahmedabad in Gujarat,
and Visakhapatnam in Andhra Pradesh,Indore, Jabalpur, Dewas and Ujjain in Madhya Pradesh,
select locations of Mumbai in Maharashtra,Kolkata in West Bengal, Lucknow in Uttar Pradesh,
Bhubaneswar in Odisha, Mussoorie in Uttarakhand, Collectorate’s Office in Meerut, and at MG
Road in Vijamatche among others.

In March 2016, Jio started providing free Wi-Fi internet to spectators at six cricket stadiums
hosting the 2016 ICC World Twenty20 matches. .

1.10 JIO APPS :

In May 2016, Jio launched a bundle of multimedia apps on Google Play as part of its upcoming
4G services. While the apps are available to download for everyone, a user will require a Jio SIM
card to use them. Additionally, most of the apps are in the beta phase.Notable apps include:

o JioPages - a web browser for Android devices

o JioChat - instant messaging app
o JioCinema - online HD video library
o JioCloud- cloud-based backup tool
o JioHealth - health services app
o JioNews - e-reader for news
o JioMeet - video-conferencing platform
o JioMoney- online payments/wallet app
o JioSaavn - for online and offline music streaming in English and Indian languages
 o JioSecurity - security app
o JioTV - TV Channels streaming service
o JioVoice - VoLTE phone simulator
o MyJio - manage Jio account and digital services associated with it.

CHAPTER 2 : RESEARCH METHODOLOGY

A Research Methodology defines the purpose of the research, how it proceeds, how to measure
progress and what constitute success with respect to the objectives determined for carrying out
the research study.

The appropriate research design formulated is detailed below.

• Exploratory Research: This kind of research has the primary objective of development of
insights into the problem. It studies the main area where the problem lies and also tries to
evaluate some appropriate courses of action.

• The research methodology for the present study has been adopted to reflect these realties
and help reach the logical conclusion in an objective and scientific manner.

Research methodology is a systematic way to solve a problem. It is a science of studying how

research is to be carried out. Essentially, the procedures by which researchers go about their
work of describing, explaining and predicting phenomena are called research methodology. It is
also defined as the study of methods by which knowledge is gained. Its aim is to give the work
plan of research.

TYPES OF RESEARCH

Research is broadly classified:

1.Basic Research

Basic research is an investigation on basic principles and reasons for occurrence of a particular
event or process or phenomenon. It is also called theoretical research. Study or investigation of
some natural phenomenon or relating to pure science are termed as basic research. Basic
researches some times may not lead to immediate use or application. It is not concerned with
solving any practical problems of immediate interest. But it is original or basic in character. It
provides a systematic and deep insight into a problem and facilitates extraction of scientific and
logical explanation and conclusion on it. It helps build new frontiers of knowledge. The
outcomes of basic research form the basis for many applied research. Researchers working on
applied research have to make use of the outcomes of basic research and explore the utility of
them.

2. Applied Research

In an applied research one solves certain problems employing well known and accepted theories
and principles. Most of the experimental research, case studies and inter-disciplinary research are
essentially applied research. Applied research is helpful for basic research. A research, the
outcome of which has immediate application is also termed as applied research. Such a research
is of practical use to current activity. For example, research on social problems have immediate
use. Applied research is concerned with actual life research such as research on increasing
efficiency of a machine, increasing gain factor of production of a material, pollution control,
preparing vaccination for a disease, etc. Obviously, they have immediate potential applications.

3. Normal and Revolutionary Researches

Basic and applied researches are generally of two kinds: normal research and revolutionary
research. In any particular field, normal research is performed in accordance with a set of rules,
concepts and procedures called a paradigm, which is well accepted by the scientists working in
that field. Normal research is something like puzzle-solving: interesting, even beautiful, solutions
are found but the rules are remain same. In this normal research sometimes unexpected novel
results and discoveries are realized which are inconsistent with the 8 existing paradigm. Among
the scientist, a tense situation then ensues, which increases in intensity until a scientific
revolution is reached. This is marked by a paradigm shift and a new paradigm emerges under
which normal scientific activity can be resumed.

4. Quantitative and Qualitative Methods

The basic and applied researches can be quantitative or qualitative or even both.

Quantitative research is based on the measurement of quantity or amount. Here a process is

expressed or described in terms of one or more quantities. The result of this research is
essentially a number or a set of numbers. Some of the characteristics of qualitative
research/method are:

• It is numerical, non-descriptive, applies statistics or mathematics and uses numbers.

• It is an iterative process whereby evidence is evaluated.

• The results are often presented in tables and graphs.

• It is conclusive.

• It investigates the what, where and when of decision making.

Statistics is the most widely used branch of mathematics in quantitative research. Itfinds
applications not only in physical sciences but also in economics, social sciencesand biology.
Quantitative research using statistical methods often begins with thecollection of data based on a
theory or hypothesis or experiment followed by the application of descriptive or inferential
statistical methods.

Qualitative research is concerned with qualitative phenomenon involving quality.

Some of the characteristics of qualitative research/method are:

• It is non-numerical, descriptive, applies reasoning and uses words.

• Its aim is to get the meaning, feeling and describe the situation.

• Qualitative data cannot be graphed.

• It is exploratory.

• It investigates the why and how of decision making.

5. Other Types of Research

Other types of research include action research (fact findings to improve the quality of action in
the social world), explanatory research (searching explanations for events and phenomena, for
example finding answer to the question why are the things like what they are?), exploratory
research (getting more information on a topic) and comparative research (obtaining similarities
and differences between events, methods, techniques, etc.)

2.1 OBJECTIVES OF THE STUDY :

 The study is aimed at mainly understanding the concept of sole proprietorship.

 To identify the benefits and risk in sole proprietorship.
 The study also focuses on the leading telecommunications company‘Jio’.
 To study customers preferences, while selecting networks.
 Identify the level of satisfaction of customers by Jio.

2.2 HYPOTHESIS :

ALTERNATE HYPOTHESIS NULL HYPOTHESIS

Sole proprietorship is more beneficial than other Sole proprietorship is not beneficial as
business. compared to other businesses.
Most of the people prefer Jio services over other Not all people prefer Jio, people still prefer
networks. other networks.
There is no significant difference between the There is difference between the respondents,
respondents about ‘the network which is used about 'the network which was used before jio’.
before jio’.

2.3 SCOPE OF THE STUDY

A sole proprietorship, also known as the sole trader, individual entrepreneurship or

proprietorship, is a type of enterprise owned and run by one person and in which there is no legal
distinction between the owner and the business entity. The business is owned and managed by
one person. The profit is not shared with anyone (as there’s no partner), the owner owns all the
profit in the business. The study aims to study about sole proprietorship with focus on Jio. As Jio
is one of the leading telecommunications company, and many people are using their services.

2.4 LIMITATIONS OF THE STUDY :

 There was time constraint for the study work given to me.
 The area considered for the study was taken randomly, so the area taken for the study was
limited.
 The responses of some consumers were not up to mark.
 The sample size taken for the survey was limited.

2.5 SIGNIFICANCE OF THE STUDY :

A sole proprietorship, also known as the sole trader, individual entrepreneurship or

proprietorship, is a type of enterprise owned and run by one person and in which there is no legal
distinction between the owner and the business entity. The business is owned and managed by
one person. The profit is not shared with anyone (as there’s no partner), the owner owns all the
profit in the business. The study aims to study about sole proprietorship with focus on Jio. As Jio
is one of the leading telecommunications company, and many people are using their services, it
also shows the satisfaction level of customers. The study mainly focuses on the best network on
which people can rely more.

2.6 SAMPLE SIZE :

2.7 DATA COLLECTION :

 Primary data : Primary data was collected by conducting survey in Mumbai and it’s
nearby area.
 Secondary data : Secondary data was collected from published articles, research papers
and various internet sites.
 CHAPTER 3 : REVIEW OF LITERATURE

Nwana (2002:15) in his fundamentals of small scale business management quoted that small
scale business Act of 2000, passed by Congress of United States fo America, which defined
small business as “one which independently owned and operated, not dominant in its field of
operation”.
Eeifedigbo (2014:9) in his introduction to business management defined sole proprietorship as
the oldest form of business organization and it is simple to organize.
The following terms are therefore emphasized in all the definitions:
1. Ownership
2. Financing
3. Policy control
They rest on one individual, the entrepreneur himself in other word, the sole proprietor is directly
responsible for ownership, financing, policy formation, management and to a very good extent,
personal involvement in actual operations of the business system and procedure and he does this
by trial and error which is most cases results in taking irrational decisions that impact negatively
on their business ventures.
Small scale business in Nigeria is dominated by sole proprietorship. Sole proprietorship operates
on the principle of the capital economy, competing among themselves and with other forms of
business organizations.
Adams Smith (2002:30) in his wealth of nation observed that “an economy is best regulated by
the invisible hand of competitor”. According to him competition among firms would ensure that
consumer gets the best possible produce and prices since the less efficient produce Therefore,
there is need for services planning before an entrepreneur start his business, lack of adequate
planning can easily lead to a complete collapse just like any other business.
Effectively planning presumes realistic forecast of profit in a relatively sufficient time period
considering the adequacy of investment input. In planning a sole proprietorship business
therefore, the entrepreneur must have a clear account recording, merchandizing, plans, business
location, potential customers, recruitment of the best but cheapest local workforce, material
mobilization, formulation, advertising and promotion, strategies, inventory valuation methods
and general method of operation. A comprehensive business plan is therefore ideal for a vision of
his proposed firm before operation starts.
Baum Back (2003:4) in his book, basic small business management, describes area of activities
of most sole business as follows:
1. Industrial concerns which includes: farming, mining, block industries/furniture,
engineering and construction.
2. Commercial concerns such as: Banking, insurance, retailing.
3. Service industries such as: Health services, educative, hair dressing, entertainment,
accounting and other professional services.
According to Ezeifedigbo (2004:9) sole proprietorship is characterized by the following. In this
type of business:
The proprietor provides all the capital required to carry on the business.
The proprietor provides the initiative, controls all the business and retains all the profits arising
from the business.
The owner takes all the risks and bears all the losses sustained in any bad year.
There is the need for cooperation between government and individuals even though government
may be the highest employee; the government cannot provide enough employment for all
citizens.
Sole proprietors through their activities contribute to national development; as a result, the
government will continue to support them so that they will continue their development activities.
Innovation is an important feature that brings about growth and development by bringing good
life to the people. Thus every government will support any venture that could lead to the
emergency of better ideas.
Various governments’ policies and programmes have been giving support and encouragement to
sole proprietors. These include the Nigeria Enterprises Promotion Decree, the establishment of
National Economic Reconstruction Fund (NERFUND), the National Directorate of Employment
(NDE) among others. It is hoped that such support and encouragement would continue in future,
this will result in a promising for sole owners.
With the policy of government to change the value system of Nigeria to prefer locally made
goods to foreign ones, a growth in the activities of the sole proprietorship are envisaged.
The increase in bank capitalization, the problems of securing capital for entrepreneurial activities
isin business organizations has already been emphasized. Though it has been narrowed of
challenges and prospects of sole proprietorship in business.
The main focus of this research is to know the challenges sole proprietors encounter, the prospect
and the role it play in an economy, which has been briefly stated above.
The sole proprietorship is the oldest and simplest form of business operated by one person whose
aim is to make profit. Most of present private business started as sole proprietorship due to easy
formation, many types spring up every day, and some grow just few weeks or months and
collapse due to number of factors. Some grow into conglomerate which at last taking over to
public corporations.
Precisely, despite various criticisms that have been elicited from different theorists and scholars,
Fayol models are still widely used. Established and well-performing businesses and
organizations have attributed their effective performance and success to the Fayol principles.
In his theory, Fayol outlined five basic functions inherent to management. The basic
management functions described by Fayol in his theory include planning, organizing, and
commanding.
Additionally, Fayol identifies coordinating and controlling as other basic management principles.
According to Fayol, outlined functions remain universal to all organizations.
He stipulated that all managers have to carry out these described functions in every day working
environment.
In addition to these, Fayol outlined other fourteen overall management principles.
Indicatively, the 14 principles provide normative guidance regarding the manner in which
manager may implement the basic five managerial roles in an effective manner (Sapru 2008, p.
33).
There is great importance in outlining these basic principles identified by Fayol regarding
managerial roles.
Particularly, this examination is important during this era of globalization, which has led to a
remarkable increase in organizational and business competitiveness.
Fayol describes the basic principles of management. Planning is one of the highlighted roles of
management. As Fayol outlines, managers have to conduct basic planning roles.
This is applicable for the future conditions. The development of strategic objectives is
objectively important for proper organizational performance. This is particularly in order for
organizations to secure the accomplishment for the future organizational objectives.
Therefore, as Fayol indicates, it is important for all the managers and other organizational leaders
to evaluate their potential for future achievements.
Future contingencies likely to influence organizations and consequently transform their
operational and strategic orientations are important. Consequently, these must be well planned
for.
Organizing is another critical management role as described by the Fayol’s theory (McLean
2011, p. 32). The organizational leaders have to organize its personnel in an effective way. The
streamlining of organizational activities and other work processes is important for effective
performance.
Generally, as evidently described by Fayol, a well planned and organized organization leads to
adequate and successful performance. Proper organization remains vital even during recruitment
processes. For effective performance, the managers have to recruit the right personnel for
specific duties.
Securing the highly skilled and learned human resource is a vital organization role that must be
conducted by the managers. Commanding is another critical management role proposed by the
Fayol’s theory.
Ideally, current organizations face stiff competition and high employee demand. In order to
remain within the competitive organizational and business mainstream, the outlined Fayol’s
theories remain largely applicable.
Effective supervision and motivation of workers is crucial within organizations (Wren &Bedeian
2009, p. 56). Evidently, most successful organizations have attributed motivation to their
innovation and novelty.
Effectively supervised and motivated workforces remains dedicated and compete constructively
to accomplish outlined goals and delegated duties.
Subordinates must be adequately supervised in their daily work processes. This should be
accompanied with their motivation to achieve the organizational goals. Motivation enhances
innovation as well as novelty.
Adequate communication and feedback mechanisms are vital within an organization. These
processes are basically oriented in the command system. They help in the articulation of
company goals and policies to all members. This also includes the subordinate staff.