Business And Organization Structures Of Business Essay
There are different types of businesses. Some of them are Sole Traders, Partnership businesses and Limited companies.
Sole Traders are the types of organization which is run by a sole owner. There is one person in charge. The sole trader takes the decision of expanding the business, how to operate and what kind of service to provide. The benefits of sole traders is that the owner gets all the profit and have total control on how to run the business. The disadvantages are that they have unlimited liability as there is no distinction between the owner and the liabilities, they bear the risk of all losses of a business as well as if they are unwell, they have no one to depend on to run the business. Sole traders are an example of unincorporated businesses and do not have their own separate legal entity.
Partnerships are the types of organization which are set up by at least two people and can have maximum of 50 partners. The partners decide and agree on how to govern the business, the activities the business will do, allocate the capital needed to set up the business. All partners have the rights to check the financial books and the every partners have the right to vote for a change in the organization. The benefits of partnership is that every partner bear the liabilities and debt instead of just one. The general partners bear these liabilities and debts whereas, the limited partners just bear the the loss of capital they…