Nobody downloaded yet

Sole proprietorship - Essay Example

Comments (0) Cite this document
John and Christine are looking forward to carry on their practice as tax agents.They have the sufficient capital required to carry on the business as tax agents.The business structures available to carry on business as tax agents are sole proprietorship, partnership, company and trust…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER95.9% of users find it useful
Sole proprietorship
Read TextPreview

Extract of sample "Sole proprietorship"

Download file to see previous pages John and Christine are looking forward to carry on their practice as tax agents.They have the sufficient capital required to carry on the business as tax agents.The business structures available to carry on business as tax agents are sole proprietorship, partnership, company and trust. However, before selecting any structure for this business, the relative advantages and disadvantages of each are needed to be considered. FINDINGS: SOLE PROPRIETORSHIP: An entity where the person opening the business constitutes without any contract with others or incorporation of the entity. The person is solely responsible for all the debts and liabilities of the business. Advantages: It is the cheapest and easiest business structure. Sole proprietorship is under complete control of the person organizing it. Sole proprietor may retain and reinvest all the incomes of the business on its own motion. The payment of tax is easy and may flow directly to the tax return of the sole proprietor. The business may be dissolved easily. Disadvantages: The liability of sole proprietors is unlimited. So, the businesses as well as the personal assets of the sole proprietor are at risk. There are very limited sources available for the raising of funds as opposed to companies where fund raising is very high. PARTNERSHIP: An association/relationship of two or more persons to carry on a business for the purpose of earning profits is known as partnership. (Revised UPA, Section 101) Advantages: Partnerships are easier to establish as compared to companies. The two or more partners may increase funds more easily as compared to sole proprietorship. They may also have increased borrowing capacity. The pool of skills, knowledge and expertise is made wider due to the combination of more than one person. Partnerships also allow brainstorming which is more creative than the brainstorming carried out by sole proprietor. Disadvantages: Partners are liable for the actions of other partners as they act as agents for one another. The decisions between all partners are shared and this may cause disagreements which is the most drastic situation for a partnership. The liability of all the partners is unlimited.. However, this limitation may be overcome by constituting limited partnership. In limited partnership, the investments of the partners are liable for the debts of the firm and the partners’ personal assets are not liable. COMPANY: A company is a separate legal entity from its owners. So, the shareholders and members of the company are liable for the debts of the company only to the extent of their share/ interest in the company. The company which offers its shares to the general public for subscription is known as public company. The company which does not offer its shares to general public is known as private company. Advantages: The liability of the shareholders and/or members of the company are restricted to the value of shares purchased by him. The company is a separate legal entity i.e. separate from its members. Therefore, any suit against the company does not involve the members personally as opposed to partnerships where the partners are personally got involved in the suits. In private limited companies, the shareholders and directors of the company are usually same person keeping the ownership and management of the company in same hands. Disadvantages: The formation of company is costly as compared to partnerships and may require large amount of capital initially. Whereas, partnership and sole proprietorship does not require any such large amounts. The accounts of companies are complex in nature. Moreover, the statutory regulations and the company law of the country require the companies to follow the regulations regarding bookkeeping and certain types of accounts. The raising of funds and capital by the companies is also restricted to the authorized capital of the company. Moreover, in case of a private company, the increasing of capital is also usually restricted by the provisions of the company law of ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Sole proprietorship Essay Example | Topics and Well Written Essays - 1500 words”, n.d.)
Retrieved from
(Sole Proprietorship Essay Example | Topics and Well Written Essays - 1500 Words)
“Sole Proprietorship Essay Example | Topics and Well Written Essays - 1500 Words”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Sole proprietorship

The Sole proprietorship

...?There are three types of business structures: sole proprietorships, partnerships, and corporations. A sole proprietorship is a business owned by a single person. The owner often acts as the manager of the company which creates an intrinsic agency problem. An agency problem is a conflict of interest between the management and ownership group. In the United States there are 29.41 million business establishments (Census). Starting your own business is a great way to become financially independent and self-employed. A sole proprietorship has many advantages such as control over the decision making, flexible working hours, and the pride of...
3 Pages(750 words)Admission/Application Essay

The Sole Purpose of The One Percent

...?Yohannes Abera 11/12/11 Lead 219 C. The Sole Purpose of The One Percent The Occupy Wall Street movement, which has since spread to other locations all over the world, has made the terms "One Percent" and "99 Percent" part of mainstream culture. Despite the fact that nearly everyone has heard of these terms, many might not realize what these terms actually mean. Members of the 99 percent want to expose the one percent for what it truly is, but the goals of the one percent must be made clear before that can happen. The reality is that the one percent wants to maximize its profits as much as possible, which, in turn, will eliminate the middle class and give the upper echelon of society more political power. Once this...
3 Pages(750 words)Essay

Legal Structure: Sole Trader

...?Business Readers point Legal structure: Sole trader The business proposal I have come up with is about a stationery shop which deals with a wide variety of stationeries needed in offices, homes and institutions of learning. The name of the business ‘readers point’ was arrived at after a survey of the target clients. The name is catchy and also sells out to new clients what the business is all about. Sources of funding are savings of ?25,000, Princes Youth Trust business grant ?4000, loan ?6000 and bank loan of ?20,000. I intend to use my savings and the bank loan for the start capital and the Princes Youth Trust business grant and loan for the operations of the business in the first two months before the business is...
6 Pages(1500 words)Essay

From a Sole Proprietorship to a Corporation

...From a sole proprietorship to a corporation Starting a corporation is more complicated than starting a proprietorship or partnership (Ross, Westerfield & Jaffe, 14). As such, the paper outlines the major factors that are considered when one is starting a company or a corporation as it may also be called. The paper starts by describing the meaning of corporation and its nature and this will be followed by describing the company business, products and operations. The paper will also outline how the company will be funded as well as tracing the company development from sole proprietorship to a major corporation. A corporation is a distinct legal entity with...
5 Pages(1250 words)Essay

Purification Planning for Sole Proprietor

...Zhiying Yvonne Chen Dennis Gee TAXX 344 October 18, 2009 Recommendation of Purification Planning for Sole Proprietor Table of Contents1. Executive summary 1 1. Introduction 2 The example of Cell City: 10 A number of factors come into play, and the owners rely heavily on the rules and regulations to make this decision. They may have tax-related questions but will also want to know the advantages and disadvantages to the business. The report analyzed and discussed alternative tax planning for Cell City, and recommended some simple solutions and complex methods for purification for sole proprietor. 12 5. References 13 Executive summary This paper analyzes the prickly effects associated with...
12 Pages(3000 words)Case Study

Cordelia Is the Sole True Daughter of King Lear

...Cordelia is the sole true daughter of King Lear. King Lear asked his three daughters, Goneril, Reagan and Cordelia , how much each of them loved him. Goneril and Reagan answered him with lavish praise but Cordelia remained silent. My thesis is that in spite of her silence, Cordelia is the only true daughter of King Lear. Goneril said: Sir, I love you more than words can wield the matter; 'Dearer than eye-sight, space, and liberty; Beyond what can be valued, rich or rare; No less than life, with grace, health, beauty, honour; As much as child e'er loved, or father found; A love that makes breath poor, and speech unable; Beyond all manner of so much I love you.' (Act I. Scene I. King...
4 Pages(1000 words)Essay

Recommendation of taxtion for sole proprietor Canada incorporate

...the structural, organizational and legal framework of reference in the Canadian context. Corporate entities including sole proprietorships in Canada have their own tax obligations. Thus sole proprietors’ tax liabilities to the government are determined by the same rules of liability determination under the commercial law. For instance under the corporate tax laws in Canada a sole proprietor is liable to pay taxes on his gross income after such deductions as for those of his dependents, Capital Cost Allowance on equipment, professional dues, if it’s a home-based business a certain amount as rent deductible and Canada Pension Plan contribution have been made. At a...
13 Pages(3250 words)Research Paper

Advantages and Disadvantages of Sole Proprietorship

...(including dining tables, bedroom sets, cupboards, chairs, book shelves etc) for their households; therefore, the demand for furniture products is relatively inelastic and will exist because it is a human need. However, the purchasing power of a customer could affect the demand of designed and branded furniture products. In more simple words, Katy who is adept in designing and marketing should opt to commence her own business in the light of following costs and benefits analysis of each available business option including Sole Proprietorship, Partnership, Limited liability partnership and Company formation. Katy could definitely make a rational business decision after reviewing the mentioned...
6 Pages(1500 words)Essay

A sole trading business in Western region

...A sole trading business in Western region Section The business that has to be set up is a sole trading business offlowers that has international business with the western region. The sole trading business of flowers would be set up under the name of “Florist Fragrance” in UAE. The business would cater to the customer in the Western markets with the high quality products of flowers and its accessories like flower bowls, flower pots, etc. Advantages The international business of the florist has the following advantages in the market of UAE. The government of UAE has become aware of the growing international trade of flowers in the western countries and the middle-east as well as other...
5 Pages(1250 words)Assignment

Net Profit Margin as the Sole Performance Measure

...ADVANTAGES AND DISADVANTAGES OF USING THE NET PROFIT MARGIN AS THE SOLE PERFORMANCE MEASURE Net Profit Margin as the Sole Performance Measure Net profit margin is the net profit as a proportion of revenue. It is calculated by first getting the gross profit which is total revenue minus cost of goods sold or cost of sales. From the gross profit subtract tax to get the net profit. The net profit margin is net profit over total revenue (Robert and Leslie 1999, p. 17). Net profit margin can be used to determine the company’s management ability to control costs A good management structure should be able to efficiently manage expenses and cost in order to increase profit. A company is not well managed if there...
3 Pages(750 words)PowerPoint Presentation
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Sole proprietorship for FREE!

Contact Us