Business Structure : Sole Trader, Partnership, And Company Essay

Business Structure : Sole Trader, Partnership, And Company Essay

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There are some basic business structures can be applied in different type of business and that use them. There are different basic organization structures first one is sole trader, partnership, and company. Here every individual organization structure have own features as well as some advantages and disadvantages from their own point of view. The organization structure can be applied on base the situation that what type of business position and structure can be adopted. Here there are different structural of organization are follows with their advantage and disadvantage.
1:- sole trader:-
Sole trader is the simplest type of business organization. Sole trader is business where is only one owner who can manage and control all business. Sole trader have the legal ownership of the business, it means it will own name. The sole traders are personally liable for the debts of the business. All profit of the business is debts of the owner. In the sole trader the owner has no partners. The profit of the business which is receives by the owner who is taxed as an individual. However the sole trader has no limited liability which means that they are responsible for all the credit of the business. They are producing an annual accounting for the Inland Revenue. Example of sole trader business include:- small retailers, plumbers, builders, market traders, grocers and butchers. A large number of people setting up a new business for the first time will create a sole traders business. (small business development corporation)
There are different advantages and disadvantages which is follow in business.
• In sole trader business which owner can take all decision in working Environment.
• Freedom to run your own business.
• Owner her own b...

... middle of paper ...

... company cannot sell their shares to the wider public. Shares can be only traded with the permission of the board of directors. In Contrast, public company shares are generally available in stock exchange. A private company will have ltd.
Advantage of company:-
• The main advantage is that shareholder liability is limited. And limited liability company structure is well understood by financial and suppliers and customers.
• Pool of resources
• Continuity :- if the shareholder or director are pull out then company can continue
• Transferability of shares: the share of a public company is freely tranferable.
• Credibility in marketplace. (business tas)
Disadvantage of company:-
• Profit or payment of company is taxable.
• It is complex to reporting.
• Difficulty of formation:- the promotion of company is not easy task there are number of stage involved in promotion.

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