Memorandum of Advice Discussion 2022

Running head: BUSINESS LAW
Business Law
Name of the Student
Name of the University
Author Note

BUSINESS LAW1
Memorandum of Advice
Any person who has been proposing to form a business can effect the same in three
variations. This includes sole trading, partnership as well as private limited company. The
decision to choose any of these form of business certain aspects needs to be considered. This
includes the kind of liability arising from the business, the legal documentation as well as the
incorporation requirements, The raising of the finance for the establishment of the business
and the control as well as ownership of the business. All these factors need to be discussed
for the purpose of arriving at a conclusion as to which form of business will be best suited in
the provided scenario.
A sole trader depicts a form of business where the owner is considered to be the
personality of the business. In this form of business, the owner and the business are the same
personality for the purpose of incurring liability. All the liabilities incurred by the business
are to be treated as personal liabilities for the owner. This is because no separation is drawn
between the trader and the business in case of sole trader. The expenditure that this form of
business requires for the purpose of being established and other business cost relating to the
same is more budget friendly than that of other forms of business (Mould & Comunian,
2015). This enables the person proposing to form the business to reach the finances to
establish the business easily. Moreover, in case of sole trader the incorporation, availing of
licence as well as permits are much easier and the compliances are less complicated than that
of any other forms of business. The optimum amount of capital required for business of sole
trader also adds to the easier establishment of the same. Moreover, being a business
belonging to a particular individual the soul control as well as ownership of the business lies
with the trader. All the liabilities as well as decision making lies with the trader only
(Meager, 2015).