Business Management Affairs Coursework Example | Topics and Well Written Essays - 1750 words

Business Management Affairs - Coursework Example Sole Trading When a person individually initiates and operates his/her own business, it is called sole trading. The most obvious feature of sole proprietorship is that there is no legal distinction between the business and the owner. Usually, a sole trader uses a trade name or business name instead of his legal name. Under UK company law, the proprietors’ name must be shown on business emails, business stationery, and other business premises. It generally involves lower amount toward capital investment as compared to other modes of business ventures. It is best fitted to people with innovative business ideas and sufficient capital for running their business. The main benefit of this system is that the businessman owns everything what he acquires from the business. Moreover, with the feasibility of self guidance, the individual can grow without restrictions. In addition to this, as Tonkin (2006) states, sole trader can start the business with minimum set up cost and can continue operations without a tax file number. He is also exempted from many other legal charges and superannuation. Since the sole trading business specifically focuses on certain market segments, the sole trader can effectively satisfy the customer needs. In addition, the individual can take advantages of personal relationships for the business promotion. On the other hand, sole trader is not free from risks as he is the only person responsible for any loss incurred in the business. Therefore, if the sole trader faces business loss; his every asset including personal asset may be seized to discharge the liabilities he has incurred. This personal liability becomes the most threatening disadvantage of sole proprietorship. A series of legal obligations may also drag him out of the line; sometimes he needs to pay provisional taxes. Similarly, sole trader may face difficulties in the event of an unforeseen contingency since he has only restricted access to financial sources. The lack of access to financial sources also becomes a barrier for the sole trader to recruit high-caliber employees. Another major disadvantage of sole proprietorship is that it cannot allow credit sales since this type of business has limited access to working capital; this situation is an impediment to business expansion. A positive spell of possible success is foun d in the given discussion. As Matt is the winner of the TV show â€Å"You’re Hired†, he may have creative concepts as well as sufficient capital to start his business as a sole trader. Partnership When two or more persons join together with their capital and make contract to run a lawful business, it is called partnership business. This system ensures collective responsibility for all liabilities arising on the ground of the partnership business. As it is in the case of sole trader, registration of partnership is not necessary. This feature helps the partners in minimizing the struggles of legal formalities. All the strategies of partnership firms are formulated on shared opinion of partners which would make the policies rather balanced in their nature. At the same time, any partner may represent the business without giving prior information to other partners; therefore, one partner’