Form of business ownership, Business Management

Discuss in detail the form of business ownership that you would recommend for Luke's business. Justify your answer.

I would recommend that Luke forms a partnership.

"These are unincorporated associations and the rules that govern them were established in the partnership act of 1890. A partnership does not have a separate existence from its members. The number of partners can range from two to twenty.The partners provide the finance for the organisation, and the profits and losses will normally be shared in an agreed proportion depending on the individual's contribution to the partnership.

Partners have unlimited liability: each partner is jointly liable with the other partners for any debt. Like sole traders, there is no legal obligation for partners to publish their accounts. Well-known examples of partnerships occur in the professions, such as solicitors, accountants and estate agents." 

There are many factors that prevent him from forming a sole proprietorship and some factors the support the idea that he should form a partnership. If he were to start by himself, he may fail the business before he even could get started. Firstly he has no knowledge of business and will only have a Degree in Information Technology once he graduates from university. Therefore he would understand very little of how to run a business properly and this would ensure, almost absolutely that his business will end up in ruins. Furthermore, he has a roommate that will graduate and the same time as him and will be receiving a Degree in Business. This is a good chance for Luke as his roommate is willing to start up an enterprise and put his Business skills to good practice. Having a partner like him would ensure better chance at success and less stress as one can manage the services and what else is offered to the customers while the partner with the business degree can handle all the financial and business related problems of the company.

Partnerships are very simple to manage and simple to form and they also lack legal requirement. Many of the business liabilities although unlimited are split between partners causing less pressure on the partners. Having a person in the business that knows about the industrial world would definitely know how to draw in customers that they are aiming towards. Luke also has a problem as he does not have enough funds to get the business started consequently having a partner would help reduce the investments. Rather than paying all of it himself, the funds could be divided and the profits can be split accordingly to the amount of money and work they put in to the company or any percentage the both of them would agree on, on their partnership deed.

Posted Date: 2/18/2013 5:33:19 AM | Location : United States







Related Discussions:- Form of business ownership, Assignment Help, Ask Question on Form of business ownership, Get Answer, Expert's Help, Form of business ownership Discussions

Write discussion on Form of business ownership
Your posts are moderated
Related Questions
Q. Raising barriers to entry using information system? By investment in information technology a firm could as well erect barriers to entry that would discourage or delay other

How are the factors of organisational efficiency affected in Morale? Organisational efficiency: a. The way the organization is establish, the method the orders are specif

Write an unsolicited job application letter to a company that you would like to work for in a specific position. Include a one page profile about yourself

A 20-year-old male patient arrives at a Level One Trauma emergency facility (capable of caring for virtually any emergency).

Question 1 What is culture? Explain its characteristics and list out the various types of culture Question 2 What is conflict in an organization? What are the sources and

QUESTION Part 1 Company X is evaluating whether each of these items is a financial instrument and whether it should be accounted for under IAS 32 (1) Cash deposited in

Example: You  are given  the followings  information in regard to an item: Annual usage     = 20,00 units. Ordering cost     = Rs. 160 per order  Carrying cost    = 20 % o

Globalisation Globalisation is becoming increasingly popular amongst modern day business, due to the business market evolving at an extremely fast pace, it is necessary for or

It has been realized that inspection alone cannot build quality into a product unless quality has been designed and manufactured into it. Therefore quality awareness must be

QUESTION 1 Organisations resist change for many of the same reasons as individuals do. There are also many forces inside an organization that create resistance to changes initi