BUSINESS MANAGEMENT AFFAIRS

Business Management Affairs



Table of Contents

Introduction3

Discussion3

Sole Trader4

Limited Partnership5

Company/ Corporation6

Tax Benefits9

Liability Limits9

The General Partners Take Charge9

Conclusion10

Introduction

The study focuses on the decision of Mr. Simon of staring the new business. To start a new business, it is important for him to know about what type of, business he should go for as there are many obligations of law from which an owner has to pass. The idea of starting the business come to Mr. Simon due to Louis popularity; therefore, he decided to allocate £ 50, 000 of his own money to start a new business to make use of Louis popularity. Mr. Simon wishes to share the responsibility by inviting Louis to be part of the business; and he wants to keep the dealings of the business private as he does not want to take the risk. Mr. Simon has various option of business to chose, but it is vital that he just make use of Louis popularity.

Discussion

To advice Mr. Simon about the type of business to carry, it is important to know the advantages and disadvantages of types of business. Mr. Simon have different options to choose the business, it includes sole trader, partnership and company or corporation. To start a business, Mr. Simon must take decisions as a business owner that how he structure the business. This decision may have consequences in the long run, so it is important to consult an accountant and a lawyer to help in selecting the type of business that best fits the situation. Mr. Simon should consider the following important points;

1.His vision about the size and nature of business.

2.The business's vulnerability to lawsuits.

3.The level of control to be applied.

4.The level of structure with which he prefer to deal with.

5.The tax implications of different business structures.

6.Urge to have access to cash that will generate business.

7.The gain (or loss) expected to the business.

8.Whether to reinvest profits in the company.

To advice Mr. Simon, it is important for him to be aware that what the law is and what the law means about the types of businesses that include sole trader, partnership and company, which is mentioned below;

Sole Trader

Many small businesses start as sole proprietorships. These firms are owned by one person, usually one that has the daily responsibility of running the business. The sole proprietor owns all business assets and profits it generates. It also assumes full responsibility for any liabilities or debts. In the eyes of the law and the public, you and your business are the same thing.

Advantages of Sole Trader

Sole trader or sole proprietorship is a form of intellectual organization; which is inexpensive. In this form, of business owners have full control over individuals. In addition to this, from the perspective of law, they can make decisions as they see fit. Individuals and owners getting all the profits gained from the project work or business and entitled to retain or re-invested (Blair, Savage and Whitehead, 1989, pp. 15-22). Furthermore, the sole trader has the option of ending the business when he ...