Type of Business Essay

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Task 1.1 A: Identify and explain the purposes of four different organizations. Sole Trader: A sole trader is a business owned by one individual who is self-employed. All operations of the business to make a profit for its owner only. Where the business proves a success, all profits accrue to the owner and it is common for sole traders to reinvest a considerable proportion of these in the business and/or use them to reduce past borrowings. Should losses occur, these too are the responsibility of the sole trader, who has unlimited personal liability for the debts of the business. (M1.3 + M2.3) According to William A. McEachern (2011, p 53) maintained that “a sole proprietorship is the most common type of business, accounting most recently for 71 percent of all U.S businesses”. In addition, The Department for Business, Enterprise and Regulatory Reform (2008, p 4) There were an estimated 3.0 million (64%) sole proprietors in the UK at the start of 2007. It can be said that sole trader is the most common type of business in the world today because it easy to start up (there are no formal requirements for starting a sole proprietorship), the owner can control all business activities and all profit will belong to the owner, the competitor cannot see how you are performed because the sole trader sole trader does not need to public their information (annual report, financial statement, etc). For example, Umbrella-Fashion Vietnam, which is a online shop provide clothing for women, was established by Miss Quynh Nhi Doan. Starting up a sole trader and doing business on Facebook is a new method but it is increasingly popular. Ms Nhi has complete control over the business, its operations, and is financially and legally responsible for all debts. Of course, she is entitled to all profits when business success Partnership: Similar to sole traders, this form of business does

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