Forms of Business entities

Questions 1

Sole proprietorship

It is a form of business entity established and operated by one person. This form of business entity cannot be treated as a legal entity. The business unit owner solely enjoys all the profit realized from the enterprise and bore all the inherent risk alone (Spadaccini, 2009). A sole proprietorship can be operated under the owner’s name. The name of the business serves as a trademark name but does not give the business a legal entity separate from its owner. The sole proprietor must only register his or her name and obtain an operating license to get started. This form of business his easy to begin because few legal formalities and a small amount of capital is required to set up a new business.

Advantages

Sole proprietorship form of business is easy to set up because little capital is required to begin operating. Besides, only legal formalities such as operating license and registrations of appropriator's name are required to get the enterprise started.

The business owner is free to use his assets in the running...