Essay about Lit 1 Task 1

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LIT 1 Task 1 PART A Sole Proprietorship Sole Proprietorship is a business owned by one person, as distinguished from a partnership or Corporation. Sole proprietorship is a company, which is not registered with the state as a limited liability company or corporation. Some advantages of a sole proprietorship are that they have flexibility in operations. The sole proprietorship business is undertaken on a small scale. If any change is required in the operations, it is easy and quick to bring the changes. Another advantage in this type is the ease of promptness in decision-making, autonomy. When the decision is to be taken by one person, it is guaranteed to be quick. Thus, the entrepreneur, as a sole proprietor, can arrive at quick…show more content…
There are no outside investments or funding available to the investor. Liability factors play a major role in disadvantages too. This type of business has and unlimited liability, meaning if the business fails, the private properties are used to pay off the debt stemming from the business. These are some aspects to consider when contemplating this type of business. General Partnership General Partnership is a partnership in which each of the partners is liable for all of the firm's debts, and the actions of one partner are binding on each of the other partners. Because the partners do not enjoy limited liability, all the partners' assets can be involved in an insolvency case against the company. Because there are no shareholders, the partners receive all the profits. This comes as a major advantage. Also an advantage, general partnerships have simplified taxes. This is the biggest disadvantage this type of business has. The business itself does not pay taxes. Any profits or losses recorded by the business are passed through each partner. Taxes are still filed, but taxes are not charged to the business. The partners must also file tax returns that show their individual shares of the company's profits and losses although partners are not treated as employees. Every business type has a legal liability. For general partnerships, this comes as a disadvantage. Since general partnerships are in part owned by

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