An assignment on
Ba-1105: Introduction to Business
Business Administration Discipline,
Among a few types of Business Ownerships Sole-Proprietorship, Partnership and Corporation Business will be discussed below.
* This is the most oldest and common form of business ownership. It is a individually operated organization. * The sole proprietorship is the form of business ownership which is owned & controlled by a single individual. * A sole proprietorship is a business that is owned and controlled by a single individual * A sole proprietor is an active manager.
* Features of Sole Proprietorship Business
* Single ownership with self-management
* Easy formation
* Low Capital Investment
* Limited Size
* Single authority & control
* No separate entity
* Individual risk
* Free from Govt. Regulations
* Uncertain Stability
There are many advantages and disadvantages of sole proprietorship business that is important to know before opening this type of business.
Easy entry & exit| Unlimited Liability|
Sole profit & losses| Limited Capital|
Complete control| Limitation of personal capacity|
Use of owners abilities| Lack of stability|
Tax breaks| Lack of skilled employees|
Maintenance Secrecy| Hindrance of expansion|
Prompt decision| Inferior social status|
Above all sole proprietorship is an easy formatted business and it is easily diversifiable. One can easily form this business anytime anywhere if he has money (little amount for business). No major plan is needed to develop this business. It’s the easiest of all. * Partnership
* It is a business by two or more people
* According to the Partnership Law of 1932, Partnership is the relation between persons who have agreed to share the profit of a business carried on by all or any of them acting for all, persons who have entered into partnership with one another is called individually ‘partner’ and collectively a ‘firm’. * Partnership is an association of two or more person to carry on as co-owners of a business for profit.
To form a partnership business two or more persons must make a contract based on ‘Partnership Deed’.
* Partnership Deed includes-
* Name & address of business
* Business type and aim
* Stability of business
* Amount of total capital
* Partners name, address and profession along with their signs * Rule of profit-loss division
* Business producing & directing rules
* Accounts security
* Partners authorities, responsibilities and duties
* Each partner takes an equal share of the profits, unless the partnership agreement states otherwise And many other things regarding business
Partnership business is of 3 types such as –
I. General Partnership
II. Limited Partnership
Partnership business’s contract can be based on written contract or a voluntary or an oral agreement. It has some advantage and disadvantage:
More Capital| Unlimited Liability|
Diversified skill| Potential disagreement|
Easy startup| Instability|
Tax Advantage| Difficulty of withdrawal|
Losses are shared| Difficulty of capital|
Facility of social connection| Risk of joint responsibility| Reduce autocracy| Expression of secrecy|
To form a partnership business at least two people must make a contract (written or unwritten) and invest their money on their selected business area. Partnership business can be registered or not by the law. If the business is registered then the business gets some privilege from Law and Government. Signed partners work together to make profit and serve society through the business.
* As an artificial person recognized by law with a...