Question 1:

Business Forms Sole Trader Company Partnership

Definition Sole Trader is primitive form of [ CITATION Wil \l 3081 ] A Legal Partnership is a form if
business as a individual operates entity established by a group of business organization in which
a small business with the limited individual to Engage in and at least minimum two
Capital, and responsible alone for operate a business- commercial individual comes together and
its success or failure. or industrial-enterprise is known forms a organization by unite
as Company. their capital in to minimize risk
and expand business with
shareable profit
Merits i. [ CITATION Com20 \l i. Separate Legal entity i. [ CITATION Law \l
3081 ] Be your boss ii. [ CITATION DkS \l 3081 ]
as individual does not 3081 ]Perpetual
need to work under Existence as its
any boss as he is the existence don’t affect
owner. by deaths, insolvency
ii. All profit will be your etc.
as thre is no iii. Wide Range of
shareholder or Creativity and
partner professional
iii. As there is no legal management
process just only you because there are
need to inform HMRC highly educated
that you are self employees appointed
employed, only if u by shareholders and
earned more than a directors.
minimum pay that’s iv. High growth capacity
why its easy to set up as company can issue
iv. Low start-up cost as it new share for capital
depends on size of because no limit of
business and also shareholders
there is no other v. Lack of risk for
cost. individual as there
v. There are other are large investors.
benefits are such as
miximum
privacy,easy to
change structure and
also close.
Disadvantages i. [ CITATION Bus \l I. Lack of Secrecy as
3081 ] As a sole company has to
trader, You have registrar various
unlimited libility for statements to the
debts as ther is no registrar, and anyone
legal distictiom can access these.
between private and II. There are so many
Business Assets restrictions compared
ii. Capacity to raise to proprietorship and
 capital is limited as
sole trader can not
issue shares.
iii. Hard to take break as
you are responsible
for all day to day
business decision
taking.
iv. Limited life of
business as you are
the single taxed
person.
other business forms
as company has to
meet more legal
requirements than
others.
III. Misuse of company’s
property as
sometimes directors
and other employees
uses resources for
personal gain its
brings loss for
company.
IV. Company’s daytoday
affairs looked after by
menegers not owners
as there is lack of
personal interest, it
may resulst in
inefficiency and,
turns in loss.

Question 2:

According to Partnership Act 1892 NSW

i. Each Partner has Unlimited liability : All liabilities incurred in the Name of Partnership to
be paid by the owner’s of the Partnership firm if firms assets are not enough to settle
debts then Owner’s personal preporty such as house, car ,real-estate etc, can be seized
and sold to pay liabilities.
ii. The Partners are liable For the acts of Business: