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Sole Proprietorship

       Sole Proprietorship is a popular form of business organization and it is the most suitable form of organization for small businesses. It is one of the oldest, simplest, and common form of business organization. Sole proprietorship form of business is established, financed, owned, and managed by a single person who is known as, Sole Trader or Sole Proprietor . The sole trader bears all the risks and he alone is responsible for all the profit and losses of his business. He may borrow funds and employ people to help him but the ultimate authority and responsibility lie in his hands. Therefore, Sole trader business is a one-man show. Definition of Sole Proprietorship by L.H. Haney        The individual proprietorship is the form of business organization at the head of which stands an individual as one who is responsible, who directs its operations and who alone runs the risk of failure. Definition by B.O. Wheeler       The sole ...
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What are the various factors that should be considered while choosing the most suitable form of business organisation?

The choice of the best suitable form of organization is a very crucial decision. So, the choice should be made with great thought and consultations. Each form of business organization has its own advantages and disadvantages, and these should be considered before choosing the form of organization. The following are the various factors that should be considered while making the selection of the form of organization: 1. Nature of business: The nature of business has an important role in the choice of the form of business organization. Businesses providing direct services, like small retailers, salons, tailors, restaurants, and professional services depend on their success upon personal attention to customers and the personal knowledge or skill of the owner and are, therefore, organized as proprietary concerns. Business activities which required pooling of skills and funds, like wholesale trade, accounting firms, tax consultants, stockbroker, are better organized as partnerships. 2. Size...
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Rights and Obligations of Partners

  The rights and obligations of partners are normally mentioned in the partnership deed. In case, the partnership deed does not specify them, then the partners will have rights and obligations as prescribed in The Partnership Act, 1932. These rights and obligations are given below:     Rights of partners   1. Every partner has a right to take part in the conduct and management of the firm’s business.   2. Every partner has a right to be consulted and express his opinion on any matter related to the firm. In case of a difference of opinion, the decision has to be taken by a majority. But important issues like an admission of a new partner, change in the firm’s business, alteration of profit-sharing ratio, etc., must be decided by unanimous consent of all the partners.   3. Every partner has a right to have access to, inspect and copy any books of accounts and records of the firm.   4. Every partner has the right to an equal share in the profits of the f...
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