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Objective:

  • To familiar the students with different types of businesses.

Learning Outcome:

 ·         After attempting this GDB, students can analyze the different types of business and their attractiveness.

Scenario:

Literally, the word “business” means the state of being busy. Generally, the term business includes all human activities concerned with earning money. There are many types of businesses like sole proprietorship, partnership, Joint Stock Companies, cooperative societies and combination. Sole proprietorship is the simplest form of business under which there is no legal entity to run it but on the other hand owner has to face lack of capital and his liability is also unlimited. It simply refers to a person who owns the business and is personally responsible for its debts. Partnership is another form of business, backed up by legal formalities. In partnership, partners share their resources and experiences. In this type of business all the partners manage the business equally and profits are shared according to their investments.

Point of Discussion:

People from all over the world moving from sole proprietorship to partnerships due to the numerous benefits they get. You are required to tell why the focus is shifting from sole proprietorship to partnership?  Explain your answer with the help of at least five solid reasons.

Marking scheme: (each point carries 1 marks). You may add examples to enrich your discussion.

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Replies to This Discussion

Please Discuss here about this GDB.Thanks

Our main purpose here discussion not just Solution

We are here with you hands in hands to facilitate your learning and do not appreciate the idea of copying or replicating solutions.

Moving Sole Proprietorship to Partnership 

A partnership is a frame of mind than anything else . Definitely a legal partnership , but the specific attributes of two or more people can be partners in a joint stock company . LLCs, S- Corps , C- Corps, etc. , instead of managing a business is run , how are largely for tax purposes . But to comment on the legal and tax professionals will leave the attributes of different legal formations .

However , the EPA does not allow you to turn away inexperienced . Share a highly successful means of doing business . Indeed , the most successful business ventures started today - Microsoft , HP, Apple , Google , Facebook , Cisco , and so , many companies in the past , you can tell by their names - as Sears (and Roebuck), Proctor & Gamble , Johnson & Johnson etc. , Abercrombie & Fitch ,

Features of Sole proprietorship

1. Unlimited Liability

2. Ownership

3. Easy formation

4. Profit

5. Management

6. Easy dissolution

Features of Partnership

1. Legal entity

2. Profit and loss distribution

3. Unlimited liability

4. Transfer of rights

5. Management

6. Number of partners

Importance of Business Organizations

1. Distribution

2. Feedback

3. Finance Management

4. Fixing of Responsibilities

5. Minimum Cost

6. Minimum Wastage

7. Product Growth

8. Quick Decision

9. Recognition Problems

10. Reduces the Cost

11. Secretariat Functions

12. Skilled Salesmen

13. Transportation

Characteristics of Sole proprietorship

1. Capital

2. Easy Dissolution

3. Easily Transferable

4. Freedom of Action

5. Formation

6. No Legal Entity

7. No Legal Restrictions

8. Limited Life

9. Management

10. Ownership

11. Profit

12. Size

13. Success of Business

14. Secrecy

15. Unlimited Liability

Advantages of Sole Proprietorship


1. Contacted with the Customers

2. Direct Relationship with Workers

3. Easy Formation

4. Easy Dissolution

5. Easy Transfer of Ownership

6. Entire Profit

7. Entire Control

8. Flexibility

9. Honesty

10. Independence

11. Personal Satisfaction

12. Prime Credit Standing

13. Quick Decisions

14. Personal Interest

15. Saving in Interest on Borrowed Capital

16. Saving in Legal Expenses

17. Saving in Management Expenses

18. Saving in Taxes

19. Secrecy

20. Social Benefits

Disadvantages of Sole Proprietorship

1. Continuity

2. Chances of Fraud

3. Expansion Difficulty

4. Lack of Advertisement

5. Lack of Capital

6. Lack of Inspection and Audit

7. Lack of Innovation

8. Lack of Public Confidence

9. Lack of Skilled Persons

10. Management Difficulty

11. Much Strain on Health

12. Not Durable

13. Permanent Existence

14. Risk of Careless Drawings

15. Risk of Loss

16. Unlimited Liability

CHARACTERISTICS of Partnership

1. Agreement

2. Audit

3. Agent

4. Business

5. Cooperation

6. Dissolution

7. Legal Entity

8. Management

9. Number of Partners

10. Object

11. Partnership Act

12. Payment of Tax

13. Profit and Loss Distribution

14. Registration

15. Relationship

16. Share in Capital

17. Transfer of Rights

18. Unlimited Liability

 

Advantages of Partnership

1. Simplicity in Formation

2. Simplicity in Dissolution

3. Sufficient Capital

4. Skilled Workers

5. Sense of Responsibility

6. Satisfaction of Partners

7. Secrecy

8. Social Benefit

9. Expansion of Business

10. Flexibility

11. Tax Facility

12. Public Factor

13. Prime Credit Standing

14. Minority Protection

15. Moral Promotion

16. Distribution of Work

17. Combined Abilities

18. Absence of Fraud

Disadvantage of Partnership

1. Unlimited Liability

2. Limited Life of Firm

3. Limited Capital

4. Limited Abilities

5. Limited number of Partners

6. Legal Defects

7. Lack of Interest

8. Lack of Public Confidence

9. Lack of Prompt Decision

10. Lack of Secrecy

11. Chances of Dispute among Partners

12. Expansion Problem

13. Frozen Investment

14. Risk of Loss

15. Transfer of Rights

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