Coursework on Business Structures: Sole Proprietorship vs. Partnership

This assignment analyzes two primary forms of business ownership: sole proprietorship and partnership, using the hypothetical business 'Elite Handbags Marketing' as a case study. The student explores the advantages and disadvantages of each structure, focusing on aspects such as ease of setup, control, profit distribution, capital acquisition, and liability. For sole proprietorship, the advantages of simplicity, individual control, and direct profit are highlighted, alongside disadvantages like limited capital-raising ability and business continuity concerns. The partnership model is then examined, with its strengths in management capabilities and capital generation, contrasted against potential conflicts and resource misuse. The student provides a rationale for choosing sole proprietorship for their business, emphasizing decision-making autonomy and profit retention. The assignment incorporates cited sources to support the analysis and conclusions.

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Student’s Name
Professor’s Name
Course
Date
My imaginary business for the semester is for sales and marketing of the ladies’
handbags. The name of my business is Elite Handbags Marketing. Among the forms of business
ownership that we learnt in class I would like to pick on sole proprietorship for my preferred
business due to some of the advantages that it has over the other forms of business ownership.
Advantages of sole proprietorship
Among the list of business ownership, sole proprietorship is considered as the simplest
form of business because it has little and non-complicated requirements as compared to the other
forms. Apart from the fact that most of the business people prefer it, it is also individually
owned. One advantage is that the owner has overall control of the business and therefore easily
makes decisions of the business without having to consult anyone. The second advantage is that
the sole trader always enjoys the profits by himself without sharing unlike partnership where the
profit is divided amongst the partners. The third advantage is that the cost for starting up and
running sole proprietorship is low as compared to the costs for starting up other businesses for
example partnership. The business only requires low legal expenses and the corporate taxes are
not required (Zing 9).

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Disadvantages of sole proprietorship
Anything that has advantage must have a disadvantage on the other hand and so is the
sole proprietorship type of business. One disadvantage of sole proprietorship is that the owner
may experience difficulties in raising the capital since he is the one responsible for generating
the initial finances of the business. They may also experience difficulties in acquiring loans
especially when they do not have adequate credit to secure the added money. The second
disadvantage is that the business ca not continue when the owner dies. In case of death or
incapacitation the business ends there and no more continuation because the owner is only one.
The third disadvantage of sole proprietorship is that the owner of the business bares all the losses
that occur in the business, when the debts become too many, the business owner takes the
responsibility and at times he or she uses his own finances (Abdul, 750).
I chose sole proprietorship to be the best for my business because it will not take me a lot
of time to make the decisions of the business on how to manage and run it. I will also get
accessed to all the profits that are generated in the business without having to share with anyone.
The legal expenses that are required for my business are cheap and therefore I won’t require a lot
of capital to initiate my business.
Second I would pick on the partnership form of business ownership. Partnership is a
business operation between two or more individuals. The partners normally invest in the business
and in the end share the profits or losses generated in the company.
Advantages and disadvantages of partnership
The first advantage is higher management capability. Due to the fact that many partners
are involved in the operations of the business, they always work together to ensure the success of

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the business (Nguyen 59-66). The second one is large amount of capital is generated from the
entity due to the combined hard work of the partners. The following are the disadvantages;
disagreements rising among the partners may bring conflict in the business. There may also be
misuse of the resources of the business by the partners, (Ding 115). The reasons as to why I did
not choose this form of business are because of the disputes that might rise between the partners
when making decisions and also unmoving investment in the business.

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Work Cited
"A guide to business structures in Afghanistan : sole proprietorship, partnership, limited
liability corporation, and corporation / authors Abdul Waris Hakim Syal , Samira Abrar,
Mohammad Arif Noorzai." 2015.
Ding, Ang. "A Study on the Tendency of Sole Proprietorship for American-Funded
Investment in China and Our Countermeasures." International Journal of Business and
Management, vol. 4, no. 9, 2009.
Ding, Ang. "Chapter 1. Hook Up or Stay Solo: The Benefits of a Partnership." Business
Partnership Essentials, 2017.
Nguyen, Dung N. "Vietnam-U.S. relation: from normalization to comprehensive
Parnership - an overview." Science and Technology Development Journal, vol. 19, no. 4, 2016,
pp. 59-66.

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