Advantages and disadvantages of sole proprietorship Sole proprietorship is the most popular and the longest practiced form of business organization. Some of its advantages are the ease with which it can be established and the ease with which it can be wound up. The processes are cheap, and are free from legal formalities because only establishing a business requires registration of business name and work permit. The proprietor is entitled to all profits from the business and this motivates efforts for a successful venture. Pride in the proprietorship’s success is another advantage of the form of business organization and acts as an incentive among sole proprietors. This further facilitates healthy competition among players in the form of business organization and has positive impacts on macroeconomic aspects such as gross productivity level of an economy. Simple approach to tax that treats business revenue as the proprietor’s income, is another advantage because of the low tax rates and ease of filing tax returns. The form of business is also flexible because the proprietor is the boss. Ease of decision making due to lack of formal or moral obligations for consultations is another advantage (Pride, Hunges and Kapoor, 2011). Despite the many advantages, sole proprietorship has many disadvantages. The business has unlimited liabilities and this means that the proprietor’s personal resources can be seized to settle business’ debts. The enterprise’s life is also limited to that of the proprietor and capital base are limited because of lack of sufficient security for accessing capital. The owner also suffers all the losses and this may be significant to affect sustainability (Pride, Hunges and Kapoor, 2011). Types of financial statements for each form of business organization Financial statements for a sole proprietorship form of business are income statement, balance sheet, cash flow statement, and statement of owner’s equity. Income statement outlines costs and expenditure in the merchandise processes towards determination of net profit. Statement of owner’s equity traces, and accounts for, a business’ accumulated capital while the balance sheet offers an account of the business’ financial position by accounting for the assets and their sources. The statement of cash flow accounts for cash receipts and payments within an accounting period. The financial statements also apply to other forms of business organizations but their contents vary in complexity. Accounting for partnerships however includes partnership account besides these (Warren, Reeve and Duchac, 2011). Consequences of tax and legal implications Different legal and tax provisions apply to the different forms of business organization. Sole proprietorship is not subject to legal requirements and its taxes are treated as the proprietor’s personal income. Partnerships are subject to legal requirements such as registration of official business name, if the business does not operate under partners’ names, and subjection to formal documents such as article of association, memorandum of association. Partnerships’
Small business idea Introduction Different forms of business organizations exist for small size enterprises and different features, advantages and disadvantages, and legal, accounting, tax and other implications, characterize each form. It is therefore prudent that an entrepreneur understands these factors, for each form of business, before selecting the form in which to invest…
In the course of searching for the topic of this paper, I narrowed my options to three SME companies, which I believe are each unique in their approach – Anthias Consulting Ltd which deals with scientific instruments and analytical chemistry;
This paper addresses the importance of small scale businesses in contemporary market contexts and explains whether it would be worthwhile to set up a new small scale business. The major opportunities, problems and challenges that a business man may face in setting up a small business will be detailed and the ways to overcome the issues will be highlighted in the paper.
In the course of searching for the topic of this paper, I narrowed my options to three SME companies, which I believe are each unique in their approach – Anthias Consulting Ltd which deals with scientific instruments and analytical chemistry; Konnect9 which helps businesses dispose of their surplus goods by channelling them to those sectors in need, thereby contributing to environmental sustainability; and The Nachural Music Group, a West Midlands enterprise which is comprised of a music label and a business specialising in live event production, consultancy and corporate video production (SDE, 2009).
Since the economic meltdown has happened globally, many people have lost their jobs and it has become important for various organizations to address the key issue at hand and provide support to the government to help people out of the unemployment trauma.
In most cases, business are said to be small depending on the support they get form the government and on issues of tax policy, other criteria considers the number of employees the business has to classify it. For example if a business has 50 employees or less, it is considered a small business by the standards set by the European Union.
If the above definition is analyzed, it can be understood that planning is an activity which involves the future of an entity. The analysis of the present and to be prepared for the future is the essence of planning. Planning is a continuous and pervasive activity that is essential for the success of an organization.
Cunningham, J.B. and J.Lischeron (1991) classify that in America the term entrepreneur was considered as the one who starts his own, new and small business, some thirty years ago, which still goes with many people even today. It is a creation of the newness, a satisfaction or a change in consumer demand that brings the term entrepreneur into focus.
Since the Structural Adjustment Programme Implementation (SAP) in Nigeria of 1981-1985, small business has not done well, and did better during the process years. Incubator programs have been started in both industrial and technology sectors but have not been successful to date.
An effective business car hire service lays out the perfect strategy to realise targets and objectives in relation to the plan (CAPLAN, 1999). By having the capability to read the agency’s future, it is practical to form feasible
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