250 word minimum. ---------------------------------------------------- A potenti

Question

250 word minimum.

----------------------------------------------------

A potential client comes into your office and wants to know about Sole Proprietorships and Partnerships. They are considering starting a business, and maybe bringing on a friend to partner with. Summarize the key points of each entity type, focusing on pros and cons. Provide an example from the Internet, or make one up, to demonstrate the benefits or risks of the entity types. Then, find an article on the Registered Limited Liability Partnership, and explain why that may be a good alternative.

Explanation / Answer

Sole proprietorship is a kind of business model where business would be run by single person. Many of the new business owners prefer this kind of model because owner can take their own decisions individually regarding selling and buying. It is a simplest, effortless and less cost. Owners will signs agreement on their own names because this model doesn’t have individual identity.

Pros

Cons

For example- A person wants to starts the business like financial planner that who offers their services towards the small starts ups will come under the sole proprietorship. In this kind of business benefits can be observed like profits can be taken by the single person, there will be no need to have a big office and one or two employees will be enough. Risks like some people will take the interest and don’t return so that business leads to loss and all the risks would be held with the same person.

Partnership is a kind of business model where two or more people would be involved in the business. In this partnership model there will be many types like general partnership, equity partners and salaried partners. Every partner will invest amount in the business. Income tax will be paid by all the partners but profit and loss will be divided among the partners based on their contract.

Pros

Cons

For example- Real estate is a best example for the partnership type of model. In this model benefits will be observed like many of the employees will be the partners so that when the profits observe they can share as their salary and if any kind of risk observed in the business every partner will share. Risks like oone partner decision

Conflicts can be observed due to the different decisions.

Registered limited liability partnership is another alternative because all the partners will not have the limited liabilities regarding the financial issues. It was a new form of business model. This is a best alternative because partners will not lose their entire invested amount.

Related Questions

Navigate

• Browse (All)
• Browse 2
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.