Advaced Business Structures Essay Example | Topics and Well Written Essays - 2000 words

Advaced Business Structures - Essay ExampleMost cities and many countries require taskes - even tiny home-based resole proprietorships to register with them and profit at least a minimum tax. And if you do business under a found different from your confess, such as a custom coding, you usually must register that name - known as a fictitious business name with your country.1. Cheap Setup Cost - at that place are no legal complications in setting up a sole proprietorship. There are no minimum or maximum limits for capital thus even qualifying small business units with less capital as a Sole possessorship. The business is flexible in its operations as it can engage in any other operations without any restrictions as it may be in the case of Limited Companies.2. Reduced Operating Costs - Sole proprietorships are easy to apparatus and to maintain. Much of the running of the business is d iodine by the possessor, saving on labour costs as in that respect is no requirement to hire professional help.3. Avoidance of Corporation Tax - At the date of paying income tax, a sole proprietor simply reports all business income or losses on his or her individual income tax return. The business itself is not taxed. Sole proprietor is not required to pay Corporation Tax because it is not a separate legal entity from its owner, so the business will not be taxed separately.... For instance, if youre engaged in a low-risk enterprise such as freelance editing, landscaping or running a small band that plays weddings and social evens, your risks of facing massive debt or a abundant lawsuit is pretty small.5. Subject to Governmental Regulations - As stated above, there is no regulation on minimum or maximum capital, the sole proprietorship is not required to file its accounts with the registrar of companies, there is no need to produce memorandum or article of association. There is also no compulsary analyse as it is the case with Limited Companies. Disadvantages of Sole Pro prietorship 1. Failure to raise funds - Many fiscal institutions consider sole proprietorship as risky ventures and are not willing to extend pay to these entities. Sole proprietor may not be able to raise capital on his own unlike in partnership where they are able to share the financial burden of raising funds. 2. The Proprietor has unlimited liability - The liability of the sole proprietorship is bound to the proprietor since this type of business is one with its owner. Therefore the liability of the business is ultimately the liability of the proprietor. Since there is no law binding the owner regarding limited liability, this can prove to be fateful if the owner takes a huge loan and cannot repay. 3. deficiency of Business Skills - The proprietor does not avail the services of any professional, hence conducting the day-to-day business on his own. In many businesses, the lack of the proprietors experience would be detrimental to the health of the business unlike a Public Limit ed Company, where professionals are hired to conduct the day-to-day business. Partnerships