Sole proprietorship is a form of the business enterprise
which is established, financed, owned, managed and
controlled by an individual entrepreneur who has
complete freedom of operation, who bears all-the risks
and owner of the all profits.
Small Capital: In this business the owner have small money for
starting the business. They don’t start a big business in the market.
Unlimited Liability: A sole proprietor is personally responsible for all the
debt incurred by the business.
Limited managerial ability: In managing this type of business, the sole
trader has to rely upon his own skill and judgment for operating the
business. Most of the proprietors do not possess all the management
skills required for financing, marketing, purchasing, producing and
supervising of the business.
No Capable persons: Most of proprietorships are small business. And
have small money for pay the salaried for the capable managers and other
Technological Progress: Technological progress is often
difficult to carry for the sole trader because a few such businessmen can
afford the heavy capital outlay.
Partnership is the 2nd form of the business Organization.
A partnership is an association of two or more persons to
carry on as owners of a business and to share it’s profits and
The relationship between two Or more then two persons who
are agree for the business profits and loses on the a
** ADVANTAGES OF THE PARTNERSHIP **
Easy to form: The partnership like the sole proprietorship, can be easily
organized. The partners enter into a partnership agreement and start the
Large Capital: In this business the capital are in the large mounts because
the two partners are combined our money. For starting a business in the
Greater management ability: As there are many partners involved in the
operation of a business. There for the management of business is very
Duties: In this business the partners are share the responsibilities and
duties of the business.
Profit and losses: In this business the profit and loses is also shared among
DISADVANTAGES OF THE PARTNERSHIP
Unlimited liability: In this business the partners also have
unlimited liability as will as the Sole trade business.
Lack of Interest: The all partners do not take equal and full
interest in the business working. It’s the big problem of the
Lack of Economies: Due to small capital it cannot produce on
large scale. Because they have low money for the business.
Lack of Public confidence: The partnership form of
organization may not enjoy public confidence due to lake of
publicity and absence of regulations.
Loss of business Opportunities: In case of differences among
the partners a delay may take place in decision making. This
can cause loss to the firm.
Joint stock company is a form of the business organization.
This business is a group of the peoples combined our money
for the starting a business for make the profit and loss. On our
A joint stock company in Pakistan is registered under the
company Ordinance. 1984
ADVANTAGES OF THE ( JSC)
Limited Liability: In JSC the liability of the shareholders is limited.
Financing: In JSC have very large mounts of the money. For our
running business in market.
Production: As compared to sole proprietorship and partnership, The
JSC produces the product in large scale. And also sells large-scale
Large Membership: it has got large membership than sole proprietor
Or partnership. The number of its shareholders runs into hundreds
and even thousands in case of multi-national companies.
Easy to transfer Ownership: One of the basic feature of join stock
company is that the shareholders can transfer the ownership of share
through the share brokers.
Huge Profits: In JSC have a huge profits.
Formation: JSC have a big legal formalities need for
Lack of Interest : It’s shareholders get profits at their
homes, So they don’t attend the meeting of the business
organization. They don’t interest.
Lack of Relations: It employees are in large number of
workers. It’s cannot maintain personal relation with them.
Further management has no personal contract with the
Double Taxation: The company is subject to double
taxation. 1st the tax is levied on the profits of the company.
2nd the shareholders pay on the dividends received.