Essay # 1
16th September 2014
Differences between Sole Proprietorships and Partnerships. Provide a definition of both. Identify and explain 5 differences between them.
Sole proprietorship are businesses that owned and operated by one business owner whilst partnership must have two or more individuals participating in its ownership! The sole proprietorship is the simplest business form under which one can operate a business. It is not a legal entity and simply refers to a person who owns the business and is personally responsible for its debts. However a partnership is a single business where two or more people share ownership, still it is not a separate entity from its owners. Each partner contributes to all aspects of the business, including money, property, labor or skill. In return, each partner shares in the profits and losses of the business. There are difference when it comes to the sole proprietorship form of a business and a partnership which includes but aren't limited to Decision making, liability, conflicts, continuity and acquiring capital.
In a sole proprietorship he is responsible for decision making on his own hence he isn't required to consult with anyone when it comes to decision making. He also has the complete control when it comes to the finances and operations of the business. However when it come to a partnership form of a business, all partners are responsible for decision making that impacts the business. Likewise when it comes to how the company's resources are used and other important decision making, they all have input, providing multiple point of views which can lead to better decision making.
Next, in both sole proprietorship and partnership form of a business they have unlimited liability for business lawsuits, liabilities and obligations. In other words if they may be required...