Advantages and Disadvantages of the different types of business

There are three types of business the single proprietorship, partnership and the corporation or cooperative but in here ther are a lot of advantages and disadvantages of each type of business. I will explain first the advantages and disadvantages of single proprietorship. The advantages are if only one person or a single family is an owner of a business it isn't hard for him to decide what will be the next for his business and how the profits will be distributed, and it is easier to start the business alone, because maybe if you start a business with a partner problems may arise and the worst case the business will not be fulfilled, so it is better to start the business alone. The disadvantages are, the owner will suffer the losses if the establishment will not succeed, it has only a very limited capital, the legal liability is high, because he is the one in charge to pay all the debts, he has only limited skills, because his own skills will be used in running the business, and lastly, limited life, because if he dies, the whole establishment will be closed.

In partnership there are also advantages and disadvantages like, there are more capital and skills than a single-running business, and the business will have great efficiency because there are a lot to divide and specialize the labor and it can become successful. But, the disadvantages are like, the legal liabilities are also high bacause if you are a partner if any loss or damage you will be suffering for it(e.g. the desktop computer broke out both of you will be paying for it. Sharing the profits is the most problem(e.g. you and your partner only earned a hundred for a week, it will be hard to share it for the both of you and might cause the third disadvantage which is disagreement). Disagreement are usually caused by the sharing and differences of ideas(e.g. you have thought of having a free taste of your edible products and your partner don't want it, then it will cause disagreement).

In a corporation there are also advantages and disadvantages. It's davantages are there are a lot of capital for a business, of course if there will be a lot of stockholders there will be more capital earned, and it also have unlimited life, because even though it's original owner will die he can pass it to his descendants or to other reliable stockholder. The common disadvantages is that the problem in sharing the stocks and disagreements, it is like in the partnership but the corporation is much more bigger than it..

Different Types of Capital

There are three types of capital - fixed, circulating and freaa capital. First, the fixed capital this capital refers to permanent things. They last for a long time and can be used repeatedly. This fixed capital can be used as a collateral. This capital are office equipment like a desktop or a laptop computer, a fax machine, a photocopy machine, a water dispenser, and others, also, the factories, buildings, cars, machines, vehicles and etc. Second, the circulating capital, this capital refers to capital goods that are used only once and no more. But this capital can be replenished like gasolnie. The last is the free capital, this are goods used for production but very common. This can be sell to other producers but must be sold only on the same line of work. These are papers, raw, lumbers, cloth, plastics, and some elements.