LIT1 Task 1

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(LIT1 Task 1) Sole Proprietorship: This is a type of business is where the business and the owner are one in the same. Sole proprietorship has its advantages and disadvantages just like every form of business. Sole proprietorship is one of the easiest types of business to create. You as the owner can name, organize and carry the business as far as you dream of it going. Sole proprietorship also can have risks; as the owner you cannot bring others into the business, so the responsibility of time management, and carrying the risks of the business is on you. • Liability – There are several liability within sole proprietorship. As the owner you are a liability because you are one person (for example: If you get sick for several…show more content…
Partners agree to share profit, capital and any losses that might occur within the business. Partners also have to agree with decision being made or have consent by the other partners. • Profit retention – In a partnership profit and losses are shared unless partners agree to another form of agreement. • Location – Partnership can conduct business in more than one location at the same time. • Convenience/Burden – Convenience within a partnership is sharing the profit and the losses. Free from federal income taxes. Burdens within a partnership is having a death of a partners that might end or dissolve partnership. One of the main drawbacks of a general partnership is not being able to sell ownership to raise money. Limited Partnership: A business form that has multiple partners that runs business operations, responsible for business debt, and has one or more limited partnership who are only liable to their investments. • Liability - In a limited partnership partner cannot be active in the management firm. • Income Taxes - a limited partnership is a flow-through entity. Profits and losses will go directly to the individual limited partners. The business pays no taxes on its income. • Longevity/Continuity – Upon death during a partnership, limited partnerships will not dissolve the partnership. • Control - Limited partners

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