A lot of people involved in different types of
activities to fulfill human requirements and need. In the case of their involvement,
they try to make a profit by performing their activities. People are interested
to make a profit and maximize their wealth. But some of them can be able to
reach their destination, some of them continue their activities moderately and
some of them are lost and close their activities. Today we try to discuss the term
of business, its form, advantages, and disadvantages of the different forms of
businesses separately from my point of view. Generally, a large number of trading firms and small size business service and manufacturing firms are constructed in the form of proprietorship.
Sole Proprietorship:
A sole proprietorship, which is referred to as sole trader, individual entrepreneurship, or proprietorship. It is referred to a form of business which initiates, lead, control, and funded by one person. Only one person established the business, take all kinds of managerial decisions, and funded all required funds for the business organization. Keyperson of the organization is one who always responsible for all kinds of responsibilities like fund accumulation, organize all business and managerial activities, earning profitability, etc.
Advantages:
a. Easy to
form of a business firm.
b. Few government
roles and regulations to formation and operation a business firm.
c. Involvement of lower-income tax involvement rather than a corporate tax.
d. Easy to make any kind of managerial and business decision.
Disadvantages:
a. Absent of
legal business entity as a nature of proprietorship business firm.
b. Unlimited
liability which tracks with personal liabilities.
c. The life
of the business is limited to its owner's life.
d. Complex to collect funds to operate business working capital and other required funds.
e. Lower concentration by external financiers due to lack of legal business entity and limited life of business and unlimited liabilities tracking with personal liabilities which create problems to recover debt obligation after death or end of the business firm.
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