Sole proprietorship is useful for small business.

1. Sole trading concern is owned by only one person. 

2. He uses his own skill and intelligence for his business. 

3. Sole trader brings capital from his own savings. He may borrow from friends and relatives. However, capital collected is limited. 

4. He alone takes decisions of business. Therefore, managerial ability is also limited. 

5. Because of limited capital and limited managerial ability, it is not possible to expand business beyond a certain limit. 

6. Thus, sole proprietorship is useful for small business where limited capital and less managerial ability is needed.