Why is sole proprietorship the most common form of business ownership in Uganda?

Why is sole proprietorship the most common form of business ownership in Uganda?

Sole proprietorship refers to a business owned by one person who controls it and provides the necessary capital alone. He is sometimes assisted by family members or a few shop attendants but he remains the final authority on all the business affairs.

The sole proprietorship is the commonest form of business ownership in Uganda because of the following reasons;

  • It requires limited capital resources to start this kind of business hence many people find it convenient to operate it.
  • It involves quick implementation of decisions since the owner is the final authority over the affairs of the business.
  • It is very easy to supervise and control the business since it is small which may not be the case of large scale operations.
  • It involves minimum establishment costs since it does not call for lengthy registration procedures and documentation.

  • It promotes personal initiative which motivates hard work since the owner enjoys all the profits alone.
  • It gives one freedom to conduct business at his own pace since he is accountable to himself.
  • It is flexible hence the owner can easily change from one line of business to another to meet the consumer¬ís tastes and preferences.
  • It is not subjected to high taxes which large scale operations are subjected to hence preferred by many people.
  • It involves direct personal contacts with the customers hence enabling the owner to meet the individual needs of his customers.
  • It involves enjoyment of top secrecy since it is not a legal requirement for the owner to disclose his accounts to the public.
  • It requires little space to establish since it is small hence convenient in most areas.
  • It is the best form of business for provision of direct services like teaching since it involves direct contact between the two parties.

  • It enables provision of employment opportunities to the family members and the relatives since the owner is the final decision maker.
  • It involves less risks and losses due to the small size of the business which is not the case of large scale firms.
  • It promotes creativity and innovativeness since the owner is independent in implementing his own plans.


Published by


IAM experienced geography teacher with more than three years of teaching and creating content related to geography and other subjects for both high school and college students. hope you will find the content of this website useful to your studies and daily life

%d bloggers like this: