SOLE PROPRIETORSHIP
Hello
Readers, How are you all today? It's Beautiful to be here with y'all doing this
now and being a source of help to you all. I thank God everyday for meeting you
all and being able to write to you and generally interact with you all. Let's
Get Started.....
Sole
Proprietorship may be defined as a form of business enterprise owned, financed
and managed by one person with the primary aim of maximising profits. The Sole
Proprietorship, also popularly referred to as one-man business, is the oldest
and the most common type of business organisation. It is an unincorporated
business unit owned by one person who provides the capital, runs the business
and undertakes the risks and profits of the business alone. For Example-
Farming, Fishing etc.
Features of Sole Proprietorship:
1.
Ownership is by one person.
2.
The Main Objective of the one man business is to make profit.
3.
Life Span depends on the owner and the business can fold up at any time.
4.
The Business is controlled and managed by the owner himself.
5.
The Sole Proprietor has unlimited liability.
1.
Grants/Loans From Government.
2.
Loan and Overdraft from Banks.
3.
Trade Credit.
4.
Loan From Friends.
5.
Personal Savings.
Advantages of Sole Proprietorship:
1.
It Involves Small Capital.
2.
It is easy to establish.
3.
Taking of Quick Decisions.
4.
It requires Small Operation.
5.
There is Effective Planning.
6.
It can thrive in all Business Environment.
7.
There is privacy in conducting Business Affairs.
Disadvantages of Sole Proprietorship:
1.
There is limitation in expansion.
2.
It is not a separate legal entity.
3.
It has unlimited liability.
4.
He bears all risk alone.
5.
Inadequate Capital.
Reasons for the Continued Existence of Small Scale Business Units:
1.
Some Serve the need of Larger Firms.
2.
Availability of Goods in Remote Areas.
3.
Low Overhead Cost.
4.
Low Level of Risks.
5.
They enjoy Customer's Loyalty.
PARTNERSHIP
A
Partnership may be defined as a type of business organisation in which two to
twenty persons agree legally to set up and manage a business outfit with the
sole aim of making profit.
Features of Partnership:
1.
Ownership is by 2 to 20 persons but in a banking enterprise it is 2 and 10
persons.
2.
The Business is controlled and managed by the Partners.
3.
It is not a legal entity as the partners are not separated from the business.
4.
The Capital required to set up the business is provided by the partners based
on legal agreement.
5.
The Main Objective of the Partnership is to make profit.
Sources of Capital for Partnership:
1.
Loans and Overdraft.
2.
Personal Contributions from Partners.
3.
Admission of New Partners.
4.
Undistributed Profit.
5.
Trade Credit.
NOTE: PARTS OF THIS POST WERE CULLED FROM TONAD ESSENTIAL ECONOMICS FOR
SENIOR SECONDARY SCHOOLS BY C.E ANDE. WE AT EDU-MADE-EASY RESPECT THIS CRAFT TOO
MUCH TO DENY ITS ORIGIN. THANK YOU
Hope this was very helpful to you, leave a comment of what you think of
this tutorial and your questions below. Have a Blessed Day and Remember You are
Amazing. God Bless.
0 comments:
Post a Comment