Types Of Organization Structures Essay Example | Topics and Well Written Essays - 1500 words

Types Of Organization Structures - Essay Example The business owner is in direct control of all the elements and operations of the business, as well as bearing the accountability of all the finances of the firm, inclusive of business profits, business losses, business debts, business loans and business assets. During the beginning of the business, after getting the certificate of registration, family members can assist in running the business.Sole proprietorships are the common forms of business structures in existence in the market today, majorly because of the numerous advantages that accrue to a sole trader. For one, it is cheap, simple and quite easy to establish a sole proprietorship business very fast because it does not have numerous legal demands because they carry little or minimal ongoing legal formalities. In addition, a sole trader does not have to pay his or her unemployment taxes. However, the sole proprietorship has its own set of legal constraints making it not the preferred business form. One of the worst demerits of a sole proprietorship is the fact that owners are subject to unlimited personal liability for the debts, liabilities, and losses suffered by the business. As such, personal property can be attached to offset these liabilities. A sole trader cannot secure financing from banks on the formation of the business, or sell out some interest in the business in order to raise more capital, thereby limiting his or her capital threshold. Finally, a sole proprietorship lacks its own life, and in most cases, dies with the demise of its owner.