FARRONATO SARA
CL. 4^ F
BUSINESS ORGANIZATION
A business organization is any entity that aims to conduct a commercial enterprise
by providing goods or services to customers. There are several ways to organize a
business, from a sole proprietorship to a corporation.
1 Sole trader
Sole trader designates any business organization that is maintained and well-
ordered by one individual, even though the business may employ personnel like a
corner shop or local newsagent shop, hairdressers, plumbers or photographers.
Advantages of sole trader
• The organization requests small quantity of capital needed to
invest, which eases the original start-up budget.
• Easier to preserve inclusive business control, since the owner
has a hands-on tactic to managing the business while making any decisions
without referring to anyone.
Disadvantages of sole trader
• The sole trader has nobody to portion the business
responsibility. The owner has to deal with all duties such petty cash or
accounting.
• Sole traders frequently work extended hours and discover it
challenging to take holidays, or time off because of the commitment.
2. Partnerships
There are two kinds of partnerships from which to choose: limited partnerships and
limited liability partnerships. Like sole proprietorships, a partnership is a good way to
start a business quickly before adopting a more formal organization model.
In a limited partnership, one partner has unlimited liability and is known as the
general partner, while the other partners have limited liability.
In a limited liability partnership, every partner has limited liability, so they are all
protected from being personally responsible for company debts.
Advantages
• The sole trader is shared responsibility which allowing
specialization, where one partner’s strong point can supplement another’s.
Disadvantages
• Disputes can rise over conclusions that have to be prepared, or
about the work one partner is placing into the firm associated with another.
3 Private limited company
These types of company are incorporated, which means they have their individual
legal characteristics and can prosecute or possess assets in their personal right.
Because limited companies have their individual legal identity, their holders are not
personally legally responsible for the business’s debts. The shareholders have
