LGM10-11

• A type of business unit where one person is solely responsible for providing the capital, for bearing the risk of enterprise, and for the management of the business

• Sole Proprietorship

• Partnership

• Company

• Typically exists in sole proprietorships. It provides that each business owner is equally responsible for whatever debt accrued within a business if the company is unable to repay or defaults on its debt. An owner's personal wealth can be seized to cover the balance owed.

• Unlimited Liability

• Limited Liability

• Unlimited Capital

• Limited Capital

• 1. Easy formation and wind up.

• 2. Better Control.

• 3. Direct motivation.

• 4. Flexibility in operation

• Advantages of sole proprietorship

• Advantages of partnership

• 1. Limited capital.

• 2. Unlimited liabilities.

• 3. Limited size.

• 4. Lack of continuity.

• Disadvantages of sole proprietorship

• Disadvantages of partnership

Registration with the Department of Trade and Industry (DTI)

• Creation

• Experience

• Succession

No separate existence from the sole proprietor/owner

• Creation

• Experience

• Succession

Sole proprietorship ceases to exist upon the death of the sole proprietor or expiration of its term.

• Creation

• Experience

• Succession

• A contract whereby two or more persons bind themselves to contribute money, property, or industry to a common fund with the intention of dividing profits among themselves.

• Sole Proprietorship

• Partnership

• Corporation

(literally means the choice of person) in partnership relations refers to the rule that is inherent in every partnership that no one can become a member of the partnership association without the consent of all the partners.

• Delectus Personae

• Mutual Agency

• Partnership

Realization of profits

• • Association of Individuals

• • Mutual Agency

• • Lawful purpose or object.

• • Separate juridical personality