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Sole proprietorship and Partnership Similarities and Differences

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Introduction

Sole proprietorship and Partnership Similarities and Differences Outline Thesis: although sole proprietorship and partnership have many things in common their differences are more. II. Sole proprietorship A. Definition 1. Registration (formation) 2. Taxation 3. Liability III. Partnership A. Definition B. Types of partnership 1. General partnership 2. Limited partnership 3. Silent partner 4. Secret partner 5. Dormant partner 6. Nominal partner C. Partnership agreement IV. Similarities between sole proprietorship and partnership A. Advantages in common 1. Easy to form, does not require much paper 2. Does not need large capital 3. The business does not pay taxes, but the owners does 4. Simple to organize and managed by the owner 5. Retention of all the profits B. Disadvantages in common 1. Unlimited liability 2. More complicated in paying taxes 3. No separate legal entity V. Differences between sole proprietorship and partnership A. Advantages differences 1. Sole proprietorship a. Independent and Flexible b. Less cost of organization c. Dissolution d. Secrecy 2. Partnership a. Availability of talent and capital b. Personal interest c. Combined business skills and knowledge d. Lack of continuity B. Disadvantages differences 1. Sole proprietorship a. Difficulty in raising capital b. Difficulty in hiring highly qualified employees c. Limited management skills d. Lack of continuity 2. Partnership a. 1 partner can present the whole partnership b. Conflict c. Frozen investment VI. Conclusion: summary, which is better. Introduction Humans have evolved through the years and became more open to the world around them. With this evolution they became more aware of their needs and wants, from the realization of their needs and wants they started to look and develop ways to satisfy them. ...read more.

Middle

Scott). The third type is the Dormant partner; this partner have only contributed money in the company and share in the profit and loss, but he does not share in the management of the company and also people do not know that he exists as a partner (David L. Scott). The last type is the Nominal partner; this partner only participates by his name in the partnership, but he is responsible for the liabilities of the organization as if he was a general partner. He participates in the organization to give it a good reputation or get a good one (David L. Scott). The sole proprietorship and the partnership have many things in common. Both of them are considered the first step of forming a limited liability company or a corporation according to the Ins and Outs of partner ship. They are considered the first step because they are very simple to form, they need no papers, and the procedures of operating is very easy all they have to do is to have a good idea, not to much capital and register a taxation permission as said in the Business Structure and also Joseph & Joseph. Which makes it much safer and less risk, if it fails the owner does not loss much. It also gives the young people the opportunity to start their own business. Another matching advantage is that both of them are not charged as a firm, they are levied as individuals (the corporation pays double taxation) on the words of Joseph & Joseph. Further more they are effortless to put in order and direct because they are small according to the sole proprietor magazine, which means that they do not need a large number of employees, which additionally provides them the opportunity of personal relationship with the customers. ...read more.

Conclusion

As a result of that the have limited management skills as one person cannot know everything about the skills of management at the same time and be efficient in all of them (Scott). The partnership also has disadvantages in difference. The first one, is that one partner can present the whole company in front of the law and the investors. Which may make all of them fall in trouble because of one partner (Small Business development Center). The conflict which is the disagreement between the partners. This may destroy the company and stop it from growing and succeeding, as they will focus more on their relationship and forget the business itself (PENDECTA magazine) so they have to trust each other more and work as a team (Scott). The last disadvantage is the frozen investment, which means that although it is easy to complete even if a partner withdraw, the other partners may not agree to buy his shares and he will be stuck with them (Scott). Finally, even business is different from the other (Sole proprietor magazine), and every person should be able to choose the best one for him, according to his personality and his working habits. This means that if he likes to share responsibility and have some one to make the decision with him to be sure that he is on the right track and wants to be able to relax and have some one work instead of him, he should have a partner. If he is the opposite and likes to be independent he should establish a sole proprietorship. Whatever, he chooses the best thing to do is to work hard and do every thing to succeed. ...read more.

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