Three main forms of business organisation

Jun 18th, 2015
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The advantages of sole proprietorship (a firm is owned by a single individual) are chiefly simple decision making, total control and easy foundation of such a company. On the other hand, an owner has unlimited personal liability for company’s obligations. It can also prove difficult to raise financial capital for such a company.

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1. Three main forms of business organisationThe advantages of sole proprietorship (a firm is owned by a single individual) are chiefly simple decision making, total control and easy foundation of such a company. On the other hand, an owner has unlimited personal liability for companys obligations. It can also prove difficult to raise financial capital for such a company.In case of partnership, a firm is owned by more than one person. There are two types of partners: 1)general partners whose liability is unlimited and 2) limited partners who are liable only to their initial or further contribution to partnership. Firm can generally reach for more financial capital than proprietorship. However, problems can be caused by disagreement among partners (e.g. if they seek to sell their part of business).Corporation, a firm owned publicly by those who buy stock, limits its liability to the amount of investment. Company is able to reach for financial capital by selling stocks. It also usually has professional management. Disadvantages are possible collision interests between owners and managers. Owners ability to influence every day decisions is limited. It is also costly a legally complicated to establish such a company.QUESITON 2A) Capital and money marketAcapital marketis amarket forsecurities(debtorequity), where business enterprises (companies) andgovernmentscan raise long-term funds. It is defined as a market in which money is provided for per

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