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