PROPRIETORSHIP: Sole proprietorship is an independent business owned by one individual. Sole proprietorship businesses are relatively small and in most cases the financial resources of one person are adequate to cover operational expenditure. Characteristics of Sole Proprietorship 1. Simplicity – Starting a sole proprietorship is quiet simple. The only legal formalities are applying for the required state or local license or permit. If the sole proprietor wants to operate the business under a different
market the business under a more typical business name rather than their personal name. However, the business is not considered a separate entity and the sole proprietor is still personally liable for all obligations incurred by the business. Characteristics to keep in mind about Sole Proprietorship 1. Liability There is a lack of protection from personal liabilities, meaning that the personal assets of a sole proprietor is at risk in the event of litigation. If the business fails, any creditor can
no need to consult with a boss or board of directors most sole proprietorships operate on a small scale, the main factor that distinguishes a sole proprietorship is the sole responsibility of ownership and decisions. DISCUSSION OF THE KEY CHARACTERISTICS 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
total control of the business. • Convenience or burden (compliance) – Sole proprietorships are easy to start up. No legal authorization is needed; however some may need permits/licenses to operate depending on the business. General Partnership • Control – A general partnership...
There are four basic types of legal business ownership structures. These are sole proprietorship, general partnership, limited liability company, and corporation. This paper will outline the characteristics of each and provide an example for reference. A sole proprietorship is formed when one person owns and operates a business on his or her own and is relatively easy to start. (Shah, 2011) A sole proprietor can create their business by procuring any equipment needed and acquiring permits or licenses
TASK A The following are six forms of business organizations. Each form includes a description of the form and its key characteristics, advantages and disadvantages with respect to the following categories: Liability, Income taxes, Longevity, Control, Profit retention, Location (Expansion) and Convenience. (a1) SOLE PROPRIETORSHIP: An unincorporated business with a single person as an owner. Generally the sole proprietor acts as chief manager in all aspects of the business, but may employee
Limited Liability Partnership and limited liability company Limited Liability Partnership(LLP) Many businesses are formed as partnerships. There are actually several different types of partnerships, including limited liability partnerships. Partnerships are the most common business structure for businesses that have more than one owner. Many businesses, ranging from retail stores to accounting firms, are structured as partnerships. A business partnership is a for-profit business established
A business partnership is associations between two to twenty persons called partners who are in business jointly whose aims are make investment return. Those persons can be individuals, companies or trusts. Each partner contributes capital, labour, belongings or expertise to the partnership. It is imperative that all members involved in the partnership formalize the relationship through a written agreement in order to avert future disputes. The agreement dictates the share of profits and losses.
designed for business to be responsible any actions that occur in the business, agreements between partnerships and laws. It’s the most important decision entrepreneurs make when they start a new business this effects their establishment and operations To understand the four type of business forms I compared and contrast the four business formats which are a sole proprietorship, general partnership, corporation, and limited liablilty company (LLC), also why he or she should select one form over
(Section1 - Partnership Act, 1980) defines partnership as “a relation which subsists between persons carrying on a business in common with a view to profit”. It refers to both natural and artificial person thus, both individual and corporation are eligible to form a partnership. Joint Venture agreement does not necessarily create partnership. (Section 2 Limited Liability Partnerships Act, 2000) defines Limited Liability Partnership (LLP) as a hybrid between a partnership and a limited company “is