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Explanation & Answer
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Running Head: ASSIGNMENT
Types of business ownership
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Running Head: ASSIGNMENT
1. Sole proprietorship
This is a type of a business that is owned by one person called a sole trader. It is kind of a
simplest form of business ownership one can start. The owner has no legal entity with the
business meaning the sole trader is personally responsible for any arising risk (Rober, 2015).
Advantages
The sole trader enjoys the profits alone. The business is owned by one person and therefore
any return from the business is for the sole trader to enjoy alone. The business also encourages a
quick decision making process. This is because the owner makes major decisions regarding his
business. The process of making decisions is usually quick since the owner does not have to
consult anyone. The business is not taxed. The business also requires very little amounts of
capital to start. This makes it possible for most people to afford this business type. The business
is also highly flexible. This is due to its simplicity and the decision making process made by the
owner. The owner can therefore decide to shift from one type of business activity to another one
which is more profitable. The business also requires little legal requirements to start. That is to
mean it has little business legal and formal requirements.
Disadvantages
This business has got its own disadvantages in that ...