Arjun has been successfully managing his small bookstore. However, he falls sick and is unable to continue the business. How does this situation highlight the limitations of sole proprietorship?

Arjun's situation highlights the following limitations of sole proprietorship:

1. Lack of Continuity — The life of sole proprietorship is uncertain. Illness, insolvency or death of the proprietor may lead to termination of the business. Since Arjun is the sole owner and manager, his sickness directly affects the operations of the bookstore.

2. Limited Managerial Skills — A single person is unlikely to possess all the necessary skills in all aspects of business. When Arjun is sick, there is no qualified person to manage the business in his absence as he cannot afford to employ experts.

3. One-Man Control — Since the proprietor alone takes all decisions, the absence of the proprietor due to illness brings the entire decision-making process to a halt.

4. Limited Scope for Expansion — Due to the limitations of capital and management, the business cannot grow to a large size where professional managers can run it independently of the owner.