TYPES OF BUSINESS BY LEGAL STRUCTURE JUNE 2015 A Sole proprietorship isFor! o" B#si$ess or o%$istio$ i$ &hi'h () A$ i$*i+i*#l i$tro*#'es his o&$ Cpitl Uses his o&$ S,ill - I$telli%e$'e i$ the .$%e!e$t o"its ""irs Is e$title* to re'ei+e ll the Pro"it - ss#!e ll Ris,s o" O&$ershipO&$ership - 'o$trolLe%l stt#sCpitl.$%e!e$tSt/ilit0Ris,Pro"it shri$%Advantages Disadvantages11Ese o" For!tio$21I$*i+i*#l .oti+tio$21Fle3i/ilit041Se're'0515#i', *e'isio$ !,i$%617ire't 'o$t't81Free*o! O" 'tio$91.i$i!#! Go+er$!e$t Re%#ltio$11Li!ite* Cpitl21Li!ite* A/ilit021U$li!ite* Li/ilit041U$'erti$t0 i$ St/ilit0A7:ANTAGES AN7 7ISA7:ANTAGES OF SOLE PROPRIETORS;IP it is 'lle* prt$ership?As per prt$ership 't o" 1@22>se'tio$ 4 o" the 't *e"i$es the reltio$ /et&ee$ perso$s &ho h+e %ree* to shre pro"it o"/#si$ess 'rrie* /0 ll or $0 o" the! 'ti$% "or llFet#res11O&$ership>21Le%l stt#s> 21Cpitl> 41.$%e!e$t>51No?o" !e!/ers>617#r/ilit0> 81Ris,> 91Pro"it shri$%A properly drawn up Partnership Deed contains following clauses:11N!e o" the "ir!21Nt#re - o/=e'ti+es o" /#si$ess21N!e - **ress o" the prt$ers41S#ppl0 o" 'pitl51I$terest o$ 'pitl617istri/#tio$ o" pro"it81.$%e!e$t91Prt$ers slr0@17r&i$% /0 prt$ers101.i$te$$'e o" AA'Bs - #*it111Tr$s'tio$ &ith the /$,121.etho* o" settle!e$t i$ 'se o" retire!e$t or *eth121E3p#lsio$ or *!issio$ o" prt$er141Settle!e$t o" AA' i$ 'se o" *issol#tio$151 A 'ler '#t E3it Strte%0 Not 'o!p#lsor0 rther it is +ol#$tr0?A$ %ree!e$t i$ &riti$% is $e''esr0 "or re%istrtio$?Re%istrtio$ o" prt$ership /#si$ess is re%istrtio$ o" prt$ership *ee*It '$ /e re%istere* t $0 ti!e /0 "illi$% #p"or! ''o!p$ie* /0 pres'ri/e* "ee &ith the re%istrr o" "ir! 'o$ti$i$% "ollo&i$% prti'#lrs()i1N!e o" the "ir!ii1Nt#re - pri$'ipl pl'e o" /#si$essiii1N!e o" other pl'es &here the "ir! is 'rr0i$% o$ /#si$essi+17te o$ &hi'h e'h prt$er =oi$e* the "ir!+1N!e - 'o!plete **ress o" ll the prt$ers+i17#rtio$ o" the "ir!A $o$ re%istere* "ir! '$$ot s#ethir* prt0 "or'li! e3'ee*i$% Rs?100?A prt$er o" $o$ re%istere* "ir! '$$ot ''#se %i$st other prt$ers /e"ore the 'o#rt?A $o$ re%istere* "ir! '$$ot prese$t its 'o#$ter 'li! to the pli$ti""?A $o$ re%istere* "ir! '$$ot "iles#it %i$st $0 prt$er or "ir! itsel"?AdvantagesDisadvantages/ DrawbacksEse o" "or!tio$Lr%e !o#$t o" 'pitl7i+isio$ o" ris,E""i'ie$'0 i$ !$%e!e$tC#tio$ "or #$li!ite* li/ilit0Better p#/li' reltio$Es0 *issol#tio$Li!ite* reso#r'esU$li!ite* li/ilit0I$e""i'ie$'0 i$ !$%e!e$tU$'erti$t0 i$ st0/ilit0Restri'tio$ o$ tr$s"er o" i$terestLi/ilit0 "or *isho$est &or, o" othersL', o" se're'0Possi/ilit0 o" !is#$*erst$*i$%