The Rational Unified Process a software engineering process is gaining popularity nowadays. RUPdelivers best software practices for component software Development lifecycle It supports componentbasedsoftware development. Risk is involved in every component development phase .neglecting those riskssometimes hampers the software growth and leads to negative outcome. In Order to provide appropriatesecurity and protection levels, identifying various risks is very vital. Therefore Risk identification plays avery crucial role in the component based software development This report addresses incorporation ofcomponent based software development cycle into RUP phases ,assess several category of risk encounteredin the component based software. It also entails a survey method to identify the risk factor and evaluatingthe overall severity of the component software development in terms of the risk. Formula for determiningrisk prevention cost and finding the risk probability is also been included. The overall goal of the paper isto provide a theoretical foundation that facilitates a good understanding of risk in relation to componentbasedsystem development.