Business refers to an organization or entrepreneurial entity engaging in commercial, industrial, or professional activity. Businesses can be for-profit or quasi enterprises dedicated to a charity goal or a social cause. The term ‘business’ can also be referred to as the efforts and activities of individuals to produce and sell goods and services for profit. (Merriam Webster)
Business refers to any person, group, company or government department, or agency whose purpose is to produce or sell products or services. (Koontz and Fulmer) A business is an organization that makes available goods or services to earn profit. [Griffin and Ebert (1996)] According to Dicksee, business refers to a form of activity conducted to acquire gains for the benefit of those on whose behalf the action is completed. Businesses range in size from small to large and scale from sole proprietorships to multinational organizations.
Business plans are frequently required before operations can commence. A business plan is a formal document that indicates the aims and objectives of a brand. It also outlines the process and methods to achieve the aims and objectives. You always need a business plan when you need to borrow money to start a business. The best custom writing service can help achieve this. To start legal operations, business owners may need to get permits and licenses and comply with registration requirements. In many nations, businesses are recognized as legal (juristic) people, which means they may own property, incur debt, and institute legal actions. A business can either be individually owned (sole proprietorship) or be jointly-owned (partnership)
A sole proprietorship, also known as a sole tradership, individual entrepreneurship, or proprietorship, is an enterprise owned and run by one person. There is no legal separation between the founder and the business entity. Below is the summary of the legal status of a sole proprietorship:
It is not a legal entity distinct from the business owner.
The business owner’s responsibility is limitless.
Many people prefer this form of business as it is the most straightforward business. There are fewer rules for establishing a board of directors (because you’ll be the only one) and having documented meetings. Another apparent benefit is that you will have no one but yourself to answer. You will also have complete control over your work schedule and routine. You are also not required to share your earnings with anybody (unless you recruit staff, you will need to budget for their salary). However, this form of business is also challenging to run as there may be losses that one cannot bear alone. Because you are personally liable, every action made against your company is also brought against you. This implies that you will be responsible for all of your company’s legal bills and charges.
A partnership is a commercial entity created when two or more people agree to run a business together. Each partner is a co-owner and has invested in the company individually. A partnership differs from a corporation because it is not independent of the individual owners. Due to each partner’s additional expertise, abilities, and experience, partnerships may be pretty productive. Finally, while partnerships are more involved than sole proprietorships, they are simple. One of the worst aspects of a partnership is being held accountable for something done by someone else. In situations like this, the courts have the power to confiscate all of the partners’ assets to pay appropriate damages. It can get quite complicated when one partner wants to dissolve the firm, but the others don’t. While one may not pay as much taxes in a partnership as a sole proprietor, one is still legally and financially bound to their partner(s).
Is it preferable to have a single proprietorship or a partnership?
It hinges on your perspective and your objectives, vision, and requirements. A sole proprietorship gives you ultimate control over your business because you are the exclusive owner. You have complete control over all the decision-making, and all business revenues are solely yours. However, this significantly increases the risk. A sole proprietorship has unrestricted responsibility, which means you are personally liable for any losses. Potential investors and lenders are less likely to trust sole proprietorships. If you can’t find trustworthy partners, want to keep things simple, or want absolute control over your business, a single proprietorship is a path to go.