Sole Traders, Partnerships and Limited Companies Comparison

Sole Traders, Partnerships and exceptional Companies ComparisonADVANTAGES OF SOLE TRADERS* frugal and easy to set up a unexampled firm. Not a good deal capital is required.* The sole trader has the total control over its firm. The owner has the, hand-on approach over its business he doesnt need to consult with anyone.* The owner being the sole trader, keeps all the profit.* The business dealings ar confidential, competitors cannot hold back into the accounts of the owner.DISADVANTAGES OF SOLE TRADERS* Risk of indefinite liability. Incase of any debts, the owner is squeeze to sell its ad hominem assets.* Sole traders find difficult to enjoy economics of scale.* Since the firms argon small, banks leave behind not lend them large sum of currency and will be inefficient to hire any other long-term finances.* Problem of continuity occurs, if the owner dies or retires.PARTNERSHIPS a partnership is an contract between two or more people to form a business. Profits and losse s of a business are shared by distributively person who contributes bills, assets, labour and skill. Example, doctors, dentists etc.ADVANTAGES OF PARTNERSHIPS* It brings more flexibility as more people can contribute in the capital* Responsibilities are shared between the partners. It allows for specialization, where ones strength can complement anothers.* By introducing new partners, expanding becomes easier.* Reduction in risk of losing money, as cost can be shared among partners.DISADVANTAGES OF PARTNERSHIPS* Dispute among the partners, can affect the decision-making process.* Partnership duration is constantly uncertain.* Partners are jointly and individually responsible for the debts of firm.* exploitation of resources can be raised among partners.LIMITED COMPANY it is a legal entity. All particular(a) companies are incorporated. They can sue or own their assets in their own flop. (bbc.co.uk, 2009). It is owned by the shareholders.ADVANTAGES OF LIMITED COMPANY* It provides limited liability to shareholders. The shareholders are not individually responsible for firms debts.* Despite of deaths, resignations, the smart set continues.* Name of the company is protected and has supple borrowing powers.* Management interests and obligations are defined. Shareholders and investors are intimately assimilated.DISADVANTAGES OF LIMITED COMPANY* Possibility of takeover or merger as shares can be bought by anyone.* Disputes between, shareholders and board of directors regarding the interests.* Increase in account work and different rules.A budget is a dominant shaft of light that helps a business to take better decisions. It is most efficient cats-paw to direct the cashflows. A budget is planned to* Manage finances.* Assures continuity of coin for current commitments and for future projects.* Enables to make financial decisions.The basic budget factors that a business should consider are* Projected cashflow the cash budget tells intimately the future cash p osition on monthly basis.* Projected costs this includes costs of production, sales and marketing costs, business administration and operation costs, fixed, uncertain and semi-variable costs. (entrepreneur, 2004)* Projected revenues sales or revenues calculations are based on union of businesss sales history. Through this, business can also prepare communicate profits for the next 12 months.* Collective profits and losses each month, profit and losses are added, this total tell when the business will break even and begin earning a profit. (entrepreneur, 2004)TIM O NEIL, the founder of TT vision would also have considered the points mentioned above, when he started his business.KEY SOURCES OF FINANCES are* Bank loans and mortgages suitable for medium-sized firms. Banks can lend large sum of money for a long period of time. Rate of interest is attached to the loans.* Overdrafts right to be able to withdraw money you do not soon have. Provides flexibility and interest is paid on t he numerate withdrawn.* Trade reliance it enables the firm to have access to flexible amount of funds for a short duration. High limits and interest are charged on the amount borrowed.* Venture capital they are set-up to invest in developing countries. They stretch out capital to help businesses grow.* Lease it means businesses are paying for the use of a product but do not own it. ( bized.co.uk, 2009)The origin idea can be caf shop can turn into a business proposition. The start-up finance for the business can be sourced out ones personal assets like money held in banks, home equity loan which is truehearted and inexpensive for borrowers. Finances can also be arranged by banks, credit cards to setup a franchise. Land can be hired through lease.BIBLIOGRAPHY(2009). reckoning and business planning Internet.Available from Last accessed 15 declination 2009.Tracy, B. (2004).Drafting Your Budget Internet.Available from Last accessed 15 celestial latitude 2009. (2009).Sole traders a nd partnerships Internet.Available from Last accessed 14 December 2009.(2009).Advantages of a Limited Company Internet.Available Last accessed 14 December 2009.(2009).Public and Private Limited Companies Internet.Available from Last accessed 14 December 2009.(2009).sole trader Internet.Available from Last accessed 14 December 2009.(2009).sources of finance for business Internet.Available from Last accessed 17 December 2009.