|BUSINESS ENTITY | | | | | | | | | | | |Sole Proprietorship |Partnership |Un-incorporated Associations |Companies | | | | | | | | | | | | | | | | | |Limited Partnership |Private Companies |Public Companies | | | | | | | | | | | | | | | | | | |One Man Company |Listed |Unlisted | | | | | | | | | | | | | |De facto | |De jure | |
Types of Business Enterprises include: -
• The Sole Proprietorship
• The Partnership
• The Un-incorporated Association
• The Company
The Sole Proprietorship
This is the oldest and simplest form of business. There is a single owner who has the prerogative and responsibility of making all the ultimate decisions concerning the business. Servants or agents may assist the Sole Proprietor, if he functions without the aid of others, his obligations are in Contract and his liabilities for wrongdoing are primarily by Tort.
Advantages of the Sole Proprietorship
1. Businesses commenced and dissolved with ease.
2. There are modest expenses involved in starting up the business. 3. Businesses subject to minimum regulation by law.
Disadvantages of the Sole Proprietorship
1. Un-incorporated owner is fully liable for all the debts and other obligations incurred by his business, for in law his business has no separate legal personality. 2. The courts adopt a hostile attitude when the sole proprietor attempts to segregate his property alienating his interest in the property by passing personal assets into the name of a spouse or other family members. 3. Absence of continuity; therefore death or prolonged illness may interrupt the business and ultimately destroy it.
The partnership of the 21st century is virtually the same as it was at the start of the 19th century when it was defined by the 1891 UK partnership act as: “The relation which subsists between persons carrying on a business in common with a view to profit.” The “persons” may be companies or individuals or any combination of the two. All partners have the right to participate in the management of the business and all partners are jointly and severally...
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