Law 5 Formation of Business Entities; Assignment

Law 5 Formation of Business Entities - Assignment Example repair proprietorship is a commerce formed and controlled by the same person whereby the owner shares all scratch and risks in the art (Balotti, 2011). A sole proprietor bears all the liabilities of the business including all debts, violations and losses associated with the business. From my superior experience, some of the advantages of a sole proprietorship admit the ease of formation since only a business name and business license is needed to start the business (Emerson, 2009). The sole proprietor enjoys all the profits, close making and control of the business. A small amount of capital is needed to form the business and tax income benefits arise since tax returns are not filled as a separate business notwithstanding as personal income of the business owner (Emerson, 2009).However, some disadvantages of a sole proprietorship business include the difficulties in securing expansion capital in the capital markets, the lack of continuity after the death or incapacitation of the sole proprietor and the direct responsibility for all debts, losses and business violations of the sole proprietorship business (Balotti, 2011).The second common form of business entity is the partnership. Some types of the partnership include the general partnership and extra partnership. General partnership business is created under common law where two or more pile form a business with the sole objective of making a profit. It is created by partnership intellect that outlines the duties and method of sharing profits and losses amongst the partners (Emerson, 2009). Without such agreement, the profits and losses are shared as amongst the partners. In my own experience, partnership has certain disadvantages since each partner is jointly liable for the wrong actions of the former(a) partners and the business can terminate after the death, bankruptcy or on agreement of the partners (Emerson, 2009).The