Grade 10 | Sole Trade | Business Organisation | Sole Proprietorship | Class 11
54 بار بازدید -
3 سال پیش
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Notes1.What is sole trade ?
Notes
1.What is sole trade ?
*Businesses owned by an individual are known as sole proprietorship.
Characteristics of sole proprietorship
Capital is provided by a single person who is the owner
Profits or losses to be born alone
Unlimited liability of the owner
No legal personality
No continued existence
Not mandatory to register ( in general)
Unlimited liability of the owner
When the owners /investors/ shareholders’ liability is limited to the capital that had been invested, that is known as limited liability.
That means no any personal responsibility to pay the liability of the business when liability of the business increases more than capital invested.
Unlimited liability means owners’ liability is not limited to capital invested.
In order to settle liabilities of the business, the owner might require to use his properties external to the business and there is no limit for such commitment.
No legal personality
There are two types of person in this world.
Natural person ( Humans)
Legal Person ( Given birth by the law ) ( Example incorporated companies )
So business organization which are not legal persons can not stand in front of law as separate person from its investors and owners.
So such kind of organization which does not have legal personality should carry out its business in the name of natural persons (owners and shareholders)
Therefore , Sole Trade should carry out its business in the name of the owner.
Advantages of sole proprietorship businesses
Convenient to start
All the profits belong to the owner
Privacy of the business information is secured
Ability to use own skills at the best
Independent decision making
Disadvantages of sole proprietorship
Unlimited liability of the owner
Difficulties in raising capital
Difficulties in raising capital
No legal personality
Individual decisions of the owner can be unsuccessful
1.What is sole trade ?
*Businesses owned by an individual are known as sole proprietorship.
Characteristics of sole proprietorship
Capital is provided by a single person who is the owner
Profits or losses to be born alone
Unlimited liability of the owner
No legal personality
No continued existence
Not mandatory to register ( in general)
Unlimited liability of the owner
When the owners /investors/ shareholders’ liability is limited to the capital that had been invested, that is known as limited liability.
That means no any personal responsibility to pay the liability of the business when liability of the business increases more than capital invested.
Unlimited liability means owners’ liability is not limited to capital invested.
In order to settle liabilities of the business, the owner might require to use his properties external to the business and there is no limit for such commitment.
No legal personality
There are two types of person in this world.
Natural person ( Humans)
Legal Person ( Given birth by the law ) ( Example incorporated companies )
So business organization which are not legal persons can not stand in front of law as separate person from its investors and owners.
So such kind of organization which does not have legal personality should carry out its business in the name of natural persons (owners and shareholders)
Therefore , Sole Trade should carry out its business in the name of the owner.
Advantages of sole proprietorship businesses
Convenient to start
All the profits belong to the owner
Privacy of the business information is secured
Ability to use own skills at the best
Independent decision making
Disadvantages of sole proprietorship
Unlimited liability of the owner
Difficulties in raising capital
Difficulties in raising capital
No legal personality
Individual decisions of the owner can be unsuccessful
3 سال پیش
در تاریخ 1400/06/12 منتشر شده
است.
54
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