,
, Chapter 1: Forms of Ownership
Sole trader :
A business owned by person lit employees )
-
one have many
may
a. Advantages :
Simplicity to establish less than other structures
-
:
easy $
requires paperwork
Single layer of taxation the federal government doesn't recognize the taxable
-
:
company as a
entity
"
↳ all through
"
profits flow to the owner ,
where it is treated as personal income • taxed
accordingly .
Privacy Sole traders aren't required to report for
-
:
anything to
anyone .
However , when you apply a loan or solicit investors ,
you will need to provide detailed financial information to these parties .
Flexibility and control
-
:
+'
owners can make their own decisions ,
don't need to get approval from others .
sole your children
+1
keep business sell it
owners can the , , give it
away or
bequeath it to .
Fewer limitations personal keep all after profits the business
-
income tax
on can
generates
-
:
-
Personal satisfaction : the satisfaction of
working for themselves -
of
taking the rusks *
enjoying the rewards .
b. Disadvantages :
Financial liability if the aren't covered into serious financial / difficulties
legal
-
: owner
by any appropriate insurance • run
> lose not
only the business but
everything else
you
own ( house ,
car ,
personal investments )
Unlimited liability : a
legal condition under which
any damages or debts incurred
by a business are the owner 's
personal responsibility
for fwm 's
limited liability : unlimited
responsibility debt
use personal asset to
pay
firm 's debt in case of
bankruptcy
-
Demand on the owner : sole traders often have the stress of
making all decisions .
-
Limited managerial perspective : requires broad knowledge → cause have to
manage • do a lot of
things
-
Resource limitation fewer financial resources , fewer to get additional funds from lenders / investors
:
ways .
-
No
employee benefit for the owner
-
Limited life : owners die > sole traders die
4
Partnership : ~
run bit
Note ,
appropriate for firms that needs more
General all leadership talent
partners are general partners resources
-
: •
↳ If bankrupt dug into their pockets to pay the bills
→
general partners → run biz → unlimited hab
-
Limited /
\
limited partners →
pay based on their investment Imax amount = invested amount )
( not run biz )
, Chapter 1: Forms of Ownership
Sole trader :
A business owned by person lit employees )
-
one have many
may
a. Advantages :
Simplicity to establish less than other structures
-
:
easy $
requires paperwork
Single layer of taxation the federal government doesn't recognize the taxable
-
:
company as a
entity
"
↳ all through
"
profits flow to the owner ,
where it is treated as personal income • taxed
accordingly .
Privacy Sole traders aren't required to report for
-
:
anything to
anyone .
However , when you apply a loan or solicit investors ,
you will need to provide detailed financial information to these parties .
Flexibility and control
-
:
+'
owners can make their own decisions ,
don't need to get approval from others .
sole your children
+1
keep business sell it
owners can the , , give it
away or
bequeath it to .
Fewer limitations personal keep all after profits the business
-
income tax
on can
generates
-
:
-
Personal satisfaction : the satisfaction of
working for themselves -
of
taking the rusks *
enjoying the rewards .
b. Disadvantages :
Financial liability if the aren't covered into serious financial / difficulties
legal
-
: owner
by any appropriate insurance • run
> lose not
only the business but
everything else
you
own ( house ,
car ,
personal investments )
Unlimited liability : a
legal condition under which
any damages or debts incurred
by a business are the owner 's
personal responsibility
for fwm 's
limited liability : unlimited
responsibility debt
use personal asset to
pay
firm 's debt in case of
bankruptcy
-
Demand on the owner : sole traders often have the stress of
making all decisions .
-
Limited managerial perspective : requires broad knowledge → cause have to
manage • do a lot of
things
-
Resource limitation fewer financial resources , fewer to get additional funds from lenders / investors
:
ways .
-
No
employee benefit for the owner
-
Limited life : owners die > sole traders die
4
Partnership : ~
run bit
Note ,
appropriate for firms that needs more
General all leadership talent
partners are general partners resources
-
: •
↳ If bankrupt dug into their pockets to pay the bills
→
general partners → run biz → unlimited hab
-
Limited /
\
limited partners →
pay based on their investment Imax amount = invested amount )
( not run biz )
