FMA 1 of 5: Proprietorships and Partnerships

Proprietorships and Partnerships
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Partnerships and proprietorships constitute some of the most common types of business organization. Partnerships and proprietorships tend to be relatively simple to set up owing to their minimal legal and capital requirements. As such, people with limited resources and who lack the capacity to meet the legal requisites for a corporation as well as those whose legal environments are limiting can effortlessly start this form of businesses. Similarly, partnerships and proprietorships are only taxed once and thus, lose minimal levels of income through government levies. Consequently, partnerships and proprietorships are able to significantly cut on operating costs and maintain healthy profit margins (Lasher, 2011).
Nevertheless, the minimal levels of capital and legal conditions associated with partnerships and proprietorships negatively affect the size and security of the business, thereby rendering it impossible for t...