There are different types of businesses in which Peter can set up into. Firstly he can become a sole trader in which he may set up a business in either his own name or a business name. By becoming a sole trader you have complete control of the business and all profit which is made belongs to you; however there are advantages and disadvantages to becoming a sole trader.
The main advantages of becoming a sole trader are that the owner has independence and can run the business however he likes without having to involve others in the decision making process. Another advantage of becoming a sole trader is that you are allowed to have an overview of the whole business rather than looking over a certain part if in a partnership or a company. The disadvantages of becoming a sole trader are that the owner will have an unlimited liability of for the debts of the business so this means that if the owner was to go into bankruptcy then the owner is liable which means that the debts he was owing to the creditors might be paid off by the sale of the owners’ personal assets within the business and assets outside the business so they are putting everything at risk. Decision making is another disadvantage because all the decisions are made by the owner because there are no partners in which to make decisions with so all responsibility relies on the sole trader so the owner is liable for anything which goes wrong.
Partnership is also what he can go into but he will need to find someone who will go into partnership with him as two people are required in order for it to be a partnership. The partnership Act of 1980 defines a partnership as ‘the relation which subsists between persons carrying on a business in common with a view of profit’.
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...shareholders can sell or transfer shares easily which is also another advantage of setting up a PLC. The disadvantages include it is rather expensive to set up a plc; also there are more statutory reforms to conform to unlike a LTD. Other disadvantages include decisions taking long to be made and profit. Profit is seen as a disadvantage because it is split between greater amounts of people.
I recommend that he sets up a LLP as the LLP is easy to set up and there isn’t any need for any written agreement, another reason as to why he should set up an LLP is because of its separate legal entity so the members will not be liable for the debts of the LLP. A limited liability partnership also has a favourable tax treatment and the members are taxed on their shares which make profit. When a new member is introduced there is no tax charged is when the interest rates change.
Corporation – “A business organization that exists as a legal entity and provides limited liability to its owners.” (Longenecker, Petty, Palich, Hoy, Pg. 205) The main advantage of a corporation is that the business liability falls onto this entity instead of the individuals that own it. The disadvantages of this organization are found mostly in its formation. A corporation is expensive to create and requires compliance with state
The limited partner only risks what they invested in the business. The downside is if the limited partner becomes active then they could potentially lose personal assets. The S corporation is a more favorable tax option on income. The disadvantage is there is certain requirement that must be met. The LLC is a great option. With this type, the risk is only what is invested unlike sole proprietorship. It is easy to set up, and has tax advantages. The downside is if a corporation wanted to switch to C, it would have to pay additional taxes. I do believe the option they picked is best for them at that time. C has tax advantages. If they started with LLC and later wanted to change, it would cost them. C is a great way to get capital as well.
In this case perhaps McCoy would wish to be a limited partner and be removed from the day to day operations. An option he could choose could be to be a Limited Liability Corporation, may come with additional costs, work and headaches, but even so as we with any business it has its advantages, which includes the flexibility of who manages the business, can be easier to raise capital and add or transfer ownership interests. Owners are no longer liable for business debts, but the
Below I have set out a table to show the Advantages and Disadvantages of a public limited company. ADVANTAGES DISADVANTAGES Shares offered for sale on the stock exchange, so that large amounts of capital can be generated. Shareholders protected by limited liabilit... ... middle of paper ... ...ibit the already efficient practices from continuing.
Advantage: PLC raises a large amount of capital to expanse its business or diverse business. . In case one of the industrial declined, other industrials can cover the loss. So that it can reduce risks. They can raise funds from many ways. For example: issue shares, debentures etc.
And there are some advantages of a public limited company such as there is limited liability for the shareholders which mean the maximum losses that will cause are the amount that the shareholders invested in that company it won’t cause more than that so for the investor the risk is limited. Other than that the public limited company’s potential capital that they can raised is large they can raise fund by selling shares or borrow from bank. Also public limited company is easier to obtain financing because most of the banks and financial institution would like to invest to the larger company just like PLC. PLC have high continuity although the helm of company step down the company can still operating normally because shareholder can transfer their shares to anyone. There are many advantages of PLC but it still have some disadvantages for instance :PLC must make public annual financial report of the company also if the company close the liquidator must be realize the all assets to distribute to all creditors and shareholders. So the owner of Tesco are those people who bought the shares of Tesco. Furthermore, every year Tesco will held the annual general shareholders meeting. Tesco will report the annual accounts, strategic report and directors' report etc. to the shareholders in the meeting. Therefore the shareholders of Tesco can have more information and data to grasp more about
REFORMS As discussed above we can conclude that the principal of joint enterprise has indeed brought forward quite some injustices however down to the core, its aim is to curb gang-related incidents. The law must always evolve and therefore the criminal division should also reform as well. We cannot rely on the judicial manoeuvres such as the Practice Statement to overrule cases but instead must amend the legislation surrounding it. Recently, there has been a review by the Law Society in September of 2017 regarding the issue raised by the Crown Prosecution Service on secondary liability. It was suggested by the Law Society, that in cases of violence involving groups of people, or gangs, the prosecutor should be cautious not to charge all
A Sole Trader is a business that is owned by only 1 person. They are
Sole tradership is when the business is fully owned and managed by one person, though others can be employed to help run the business. As the sole traders only financial income is from the business and/or bank loan, they do not have the resources to expand and cover regional or national areas. These types of businesses are located in the small business sector and usually cover local areas. Such businesses could be hairdressers, corner shops or market stalls etc. Sole traderships have unlimited liability so if the business fails to pay its debts the financial responsibility falls on the owner/s to pay the debts in full even if they have to sell their business, personal possessions and assets.
Before a partnership formation is imminent, the business needs to decide on which type of partnership to form. There are three types of partnerships: (1) general partnerships, (2) limited partnerships, and (3) joint ventures. All three partnerships contain two or more owners, but all partners assume equal division of ownership, liabilities, and profits in a general partnership. Limited partnerships offer limited liability protection based on each partner’s contribution percentage. Joint ventures are classified as general partnerships with limited existence periods. Once a type of partnership has been determined, the business fulfills a series of requirements before the partnership can be successfully formed. The first step is to register
An additional advantage is that a sole proprietorship can be easily organized. It’s easy to start your own business. First of all, it costs very little money to start your own business. As a sole proprietor, you have minimal legal requirements. The owner doesn’t have to establish a separate legal entity.
...s of a partnership are the shared profit factor, which can cause a lot of animosity among the partners if things do not go as well or if there is an unequal amount of contribution among the partners. Additionally, there is both individual and joint liability with partnerships. This can often cause dissention between the partners (“SBA”). Essentially, the sole proprietorship is the best choice because the risks are minimal because it is solely one individual, who can make the best choices and decisions and deal with the consequences that arise accordingly.
if the individual does not show this, then it could be a big factor as
International trade is an economic practice where countries can import and export goods with no concerns to government intervention which includes tariffs and import/export bans or limitations. International trade has several advantages on developing countries; who are nations with low levels of economic resources or low standard of living. Developing countries can advance their economy through strategic free trade agreements. Free trade generally improves the quality of life of poor nations. Nations can import goods that are not easily available within their borders; importing goods may be cheaper for than trying to produce consumer goods. Many developing nations do not have the production procedures available for translating raw materials into valuable goods.
1.LIABILITY: There are no limits on liability with a sole proprietorship, the owner is responsible for all the businesses debts and obligations. The earning power of a sole proprietor can be limited due to lack of capital. The sole proprietor is only able to obtain personal credit to expand the company, the bank will not treat the company as its own entity