Advantages Of Using Proprietary Rights

2160 WordsSep 8, 20149 Pages
Running their businesses alone we assume that the relative entities are a business or sole proprietorship. By acting separately, both Sarah and Jane receive all profits separately; they are both free to make their own decisions concerning the running of their businesses and only pay personal income taxes on profits. The main disadvantage of this is that the owner alone is responsible for all liabilities brought on by the business for which creditors can liquidate personal assets. In other words anything in the name of the business owner can be held as capital on losses incurred. Other disadvantages include the limited ability for the owner to secure financing and capital (limited to personal funds and loans) necessary for growth and running costs. Proprietary Rights: A reason for two businesses to come together may be to acquire rights to a product or technology otherwise out of their reach. Various technologies have the potential to gain market share and boost profits in the long run thus operating as two separate entities each company is able to protect the rights of information etc. which would otherwise be shared. In this case when Sarah and Jane created a company together, the operating practices would be known by both parties, sometimes known as trade secrets. Autonomy: In this case we can see that even before the company was registered Horace Rumpole was acting on their behalf, so it is hard to keep independence levels especially when trying to cut costs
Open Document