Identify the Three Main Types of Business Organisations Recognised in Scots Law.

| A sole proprietorship is easy to create; there is minimal creation cost and time.The single owner has autonomy in decision making; sole owner makes all decisions related to the business and has complete ownership of business’s finances.

A sole proprietorship is a form of business that is owned by a single individual.  • Liability – Due to the lack of legal distinction between the owner and the business, the owner is fully responsible and liable for all debts that the business incurs in the same manner that an individual is fully responsible and liable for all debts that they incur. There is no legal distinction between the assets of the owner of the sole proprietorship and the business; this means that creditors have the ability to come after the owner’s business and personal material assets.   Income Taxes – Since the business is the same as the owner of the sole proprietorship, all profits or losses from the business are filed by the

When starting a new business, it is very important to decide the form of legal entity which may be appropriate based on a number of factors. The legal entity can be sole proprietorship, partnerships (general and limited liability partnerships), limited liability companies, or corporations. One of the most important factors to consider when deciding the appropriate form of legal business entity is complexity. If one has limited capital and wishes to start a simple business unit, then sole proprietorship is the most appropriate. The second factor is the need for protection from the risk of liabilities. If the new business operates in a volatile industry where it is possible to experience huge financial losses, then a limited liability company or partnership can be considered appropriate. The ease of formation is another factor. It is easy to form a sole proprietorship as opposed to other forms of businesses. The issue of taxation may also influence the form of business entity that a person or group of people may choose. The aim is always to minimize tax as much as possible. According to Chiappinelli (2006), another important factor that should always be considered is the ease with which capital can be raised. It is easier to raise capital in limited liability companies or in corporations than it is in sole proprietorship.

Owners are not personally responsible for debts the business may accumulate. The ownership of a limited company is divided up into equal parts called shares (Bbc.co.uk, 2014).

Sole trader-it’s a business that is owned by only one person and it can have one or more employees. This type of business organization often succeeds because the owner has total control of businees, the owner keeps all profit and it’s cheap to start-up,but also it can be difficult to raise financial,it may be difficult to specialise or enjoy economies of scale and can also have problems with continuity if sole trader retires or dies.

Private companies are seperate legal entities and have a limited liability, they are made up of at least one to a maximum of 50 members. There is safety to members in regards to debts, you will only pay the amount equivalent to your share in the company.

A sole trader runs/ owns a business entirely by himself, meaning all the decisions fall on him/ her, this is good for the owner because if he does well all the profits will go to him/her because the business itself is 100% theirs. As I said before, all the profits in the business are the owners, (everybody likes a good pay day).

Sole trader can be identified as individual businesses. Sole traders can be defined as an unincorporated business that is run by solely an individual. It is also called as a ‘sole proprietor’ or a ‘sole practitioner’. In addition, simply the sole trader is not only the

The legal entity system has profoundly affected the process of human economic and social development. Needless to say, the connotation of the legal entity system is very rich, and that the company has an independent personality and shareholders bear the limited liability is the two basic features (Tweedale, G., Flynn, L., 2007). Of course, the company 's independent personality is based on the separation of corporate property and shareholder property. Under this circumstance, the company shall enjoy their rights, fulfil obligations, and independently bear civil liability in its own name (L.C.B., 1992). However, with the development of commodity economy, and the deepening and extensive use of the legal entity system, the

A sole proprietor is a business owner with no partners in a small business, retaining all profits and income. It is the most common way of beginning a business structure due to the ease of startup for small unincorporated businesses. In her article “Sole Proprietorship—Is this Popular Business Structure Right for You?” Caron Beesley states the statistic that over 70 percent of U.S. businesses is owned and operated by sole proprietors. It is quick and requires little to no startup capital and licensing. There are minimal initial product costs too. Including using personal items an owner may purchase or have collected over time. They can use a computer from home as a point of sale machine and decorations. Usually, sole proprietors freely mix their business with personal assets. They file taxes in that way as a simpler preparation, as well as, handle checks and banking in their own name. There is no separation existence between the sole proprietorship and sole proprietor.

A sole proprietorship is a business that has a single owner who is responsible for making decisions for the company. The costs are minimal it only requires a business name fictitious, a bank account and a commercial license. The exclusive property does not have double taxes on profits, such as in other business structures as in corporations. All taxes are reported in the statement of the individual owner. The owner has unlimited liability for the business and vice versa because legally there is no difference between the owner and his business.

The sole proprietorship is the simplest form of business organization. A sole proprietorship is a business that is owned by an individual who is solely responsible for all aspects of the business. The owner is personally responsible for all debts of the business, even in excess of the amount invested. The business and its owner are thus considered the same entity.

Generally speaking, the sole proprietorship is the simplest and least expensive form of business structure. However, it provides no protection of the owner’s personal assets from claims, litigation and financial judgments.

This is a business that is owned by one person. Sole Traders are responsible for raising all the finance to set up and run the business. Usually a sole trader would be for a small business/ (businesses with a flat organisational structure). A Sole Trader can be held responsible for all the debts of the firm. Most owners like to feel in control of their own business, so this may lead to many small businesses to stay as Sole Traders, even though this will

Corporation origin from the Latin word Corpus which means body. It is formed by a group of people and has separate rights and liability from those individual. In any means, corporation exists independently from its owner and this principle is called the doctrine of separate personality. Doctrine of separate personality is the basic and fundamental principle in a Company Law. This principle outline the legal relationship between company and its members. Company’s assets belong to the company not the shareholders as assets are the equity for creditors. Company must use up all its assets to pay off the creditors if it became insolvent. The same applies to the corporation’s debts. For limited liabilities company, the shareholder liability is limited which means that the shareholder is restricted to the number of shares they paid and not personally liable for the corporation’s debts. If the company does not have enough equity to pay off debts, the creditors cannot come after the shareholders. However, limited liability company can be very powerful when in hands who do fraud and on defeating creditors’ claims. Courts then can ignore the doctrine for exception cases and lifting the corporate veil. Lifting the corporate veil is a situation where courts put aside limited liability and hold a corporation’s shareholders or directors personally liable for the corporation’s debts.