Other Organizational Forms for Small Businesses (Busniess Law) Essay

Other Organizational Forms for Small Businesses (Busniess Law) - Essay ExampleIt is the virtually popular kind of business.The owner of the business enjoys some advantages such as exemption from paying the corporal income tax. Also, he is his own boss, hence, able to keep the business secrets and make take total control of the business.This unionise of business is cheap and easy to run and dissolve without necessarily going through procedures like the opposite forms. The fact that the owner keeps all the profit is another highlight and motivation of sole proprietorship.However, this business form has its own shortcomings. For instance the owner is subject to unlimited liability of business debts. There is no disengagement between the business property and soulal property. Therefore, creditors can extend to personal property to pay for their claims. The get-go keen for this business can be an obstacle due to lack of source of financing. This can excessively hinder the expans ion of the business due to limited capital. It can also experience management problems peculiarly if the owner is not familiar with such areas. The owner may lose everything in cases where the liabilities are withal much to bear. It also lacks continuity because its existence entirely depends on the existence of the owner.In a confederacy, twain or more people come together and form a business with a visualise of making profit. Each member is called a partner the members are collectively known as partnership firm. It consists of 2 to 20 people. The members require a partnership deed or agreement which is a catalogue containing all the written agreements. Such agreements include names of the partners, how profit and losses will be shared, banking accounts, discover of commencement, rights and duties of the members etc.Advantages of this form of business include the sharing of losses. There is also more available capital to start and expand the business. Responsibilities are sh ared hence it is not a burden to one person like in