Princ of business- Business ownership
Advantages of Sole Proprietorship
- Easy and inexpensive to form - Profits all go to the owner. - Direct control of the business. - Freedom from government regulation. - No special taxation. - Ease of dissolution.
Disadvantages of Sole Proprietorship
- Unlimited liability. - Difficulty raising capital. - Limited managerial expertise. . - Trouble finding qualified employees. - Personal time commitment. - Unstable business life. - Losses are the owner's responsibility.
sole proprietorship
It's an unincorporated business owned and run by one individual in which there is no distinction between the business and the owner.
Aamer is preparing to interview for a job opening he saw on an employment board. He does a little research and discovers that the business is run by three individuals. How could he tell if the business is a sole proprietorship with two employees or a partnership of three persons?
The distinction would be if the three persons share legal ownership.
What are the most important factors to consider when choosing an organizational type for your business?
Start-up costs, control and taxation.
Which of the following is a downside of choosing a business structure where the owner has full control?
The owner has full responsibility and liability for the business.
partnership
a single business in which two or more people share ownership. Each partner contributes to all aspects of the business, including money, property, labor, or skill. In return, each partner shares in the profits and losses of the business.
General Partnerships
assume that profits, liability, and management duties are divided equally among partners. If you opt for an unequal distribution, the percentages assigned to each partner must be documented in the partnership agreement.
Limited Partnerships
more complex than general partnerships. Limited partnerships allow partners to have limited liability as well as limited input with management decisions. These limits depend on the extent of each partner's investment percentage. Limited partnerships are attractive to investors of short-term projects.
