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ADVANTAGES AND DISADVANTAGES IN EACH FORM OF BUSINESS ENTITIES - Coggle…
ADVANTAGES AND DISADVANTAGES IN EACH FORM OF BUSINESS ENTITIES
SOLE PROPRIETORSHIP
ADVANTAGES
Registration and dissolving is easy with minimum formalities
Low registration fee
Easy to manage as the management is solely done by one person, the proprietor
DISADVANTAGES
Limited source of capital
The owner is fully responsible for all the business liability and risk. There is no limited liability as in the case of private limited company
Limited ability to secure loan and credit facilities
PARTNERSHIP
ADVANTAGES
Able to mobilize more capital and expertise with additional partner.
easier to obtain financial aid compared to sole proprietorship
Improved management capability with inputs from partners
DISADVANTAGES
Partnership periods are based on partners' agreement
Profit has to be shared among partners
If one partner withdraw or dies or unable to do business, then the business is dissolve
PRIVATE LIMITED COMPANY
ADVANTAGES
Generally, credit is easier to obtain compared to sole proprietorship and partnership
Members' liability is limited to the shares subscribed only
The life span of the company is not dependent upon the death resignation of any of its members
DISADVANTAGES
The requirement for the registration of a private limited company is more difficult and the cost of registration is high
The company's tax is based on the company's tax rate
The company's information is available to the public upon request and payment of specific fess at the register of the company