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· After attempting this GDB, students can analyze the different types of business and their attractiveness.
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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From the above‐mentioned advantages and disadvantages of both sole proprietorship and partnership, we can deduce that despite the above disadvantages, partnership is an important form of business organization. This is because its formation is very easy and due to unlimited liabilities, partners take great interest in business, because in case of loss they are personally responsible.
I think a partnership is more a frame of mind than anything else. Certainly there are specific attributes to a legal partnership but two or more people can be partners in a joint stock company. The arrangements of LLCs, S-corps, C-corps etc are largely for tax purposes rather than how a business is run. But I'll leave the attributes of various legal formations for the legal and tax experts to comment upon.
However, don't let the inexperienced turn you off a partnership. Partnerships are a highly successful means of doing business. Indeed, most successful businesses today began as partnerships - Microsoft, HP, Apple, Google, Facebook, Cisco and so on, plus many companies from the past, as you can tell from their names - Sears (& Roebuck), Proctor and Gamble, Johnson and Johnson, Abercrombie & Fitch, etc.