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Small-Business Idea Paper
Finance & Accounting
Pages 3 (753 words)
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.
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. ...
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