Essay Title: 

business and society

March 24, 2016 | Author: | Posted in business, mathematics and economics

Recognizing different businesses in our area which are Sole proprietorship , partnerships and corporation , and why they so also emphasizing on what they are

Sole Proprietorship

An unincorporated business that is owned by one individual is a sole proprietorship . This is the simplest form of organization to start with and is easy to maintain . The business has no existence apart from the owner . All the liabilities are his personal liabilities . The owner undertakes the risk of the business for all assets owned . He is the only one who undertakes all the risks [banner_entry_middle]

for all assets owned . The owner includes all the income and expenses of the business in his own tax returns

Recognizing a sole proprietorship business

A provision store , in the neighborhood . One person owns this , although he keep a man to work for him , but he is the only one to mange and he feel responsible for everything that went wrong in his business . All the profits are his profits and the man who is working gets just the salary which is fixed

He pays his income tax , his self employment taxes , his employment taxes which includes

Social security and Medicare taxes and income tax with holding

Federal unemployment (FUTA ) tax

Depositing employment taxes

Others are Excise taxes . All the taxes were paid on all the profit he makes . This also makes accounting so much easier . Whatever debts he is taking are his own debts

Advantages

An entrepreneur go for this sole proprietorship legal structure because of the advantages in small businesses . There is better control , and good administration which is possible because of one owner . He is the only one to make decision , which is again quicker without having to consult others . In most cases there are no legal bondings in formation or dissolution of the business

Disadvantages

The business organised in this way will likely to have hard time raising capital since shares of the business cannot be sold , and there is less sense of ligitimacy relative to a business organised as corporation or limited libity company . Hiring employees may also be difficult . If the business is sued it is the proprietor who is in problem

Another disadvantage of this is if the business expands a lot the he might have to form a limited liability company

In our case of provision store , if the owner wants to open a chain of these provision store or he might want to develop into a supermarket then he has to switch from sole proprietorship to limited liability firm

Geeneral Partnership Firm

A partnership is one 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

General Partnership

An arrangement in which partner ‘s conducts a business jointly have unlimited liability , which means their personal assets are liable to the partnership ‘s obligations

In this case all partners have unlimited liability , thus even innocent partners can be held responsible when another… [banner_entry_footer]

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