Principles of technopreneurship

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Techno 1 notes

2.0 Sole Proprietorship
This is a firm that is owned and usually operated by one person, who receives all the profits and is responsible for all the firm’s liabilities. There is no legal separation between the assets and liabilities of the business and the assets and liabilities of the individual who owns it. A sole trader can invest in or draw funds from the business as they think fit. However, additional resources can only be raised by loans it is not possible to invite outside equity participation.

Advantages
A number of advantages that make them well suited to Small firms include a) Straightforward and easy to setup and dissolve. The owner simply stops doing business, and the firm ceases to exist. b) The owner receives all the profits (if any) directly. Income from a proprietorship is subject only to the personal income tax. c) Proprietors are accountable to themselves without being accountable to employers or other owners.
Disadvantages
a) Owner’s unlimited liability. Liabilities such as business debts, lawsuits or damages for breach of contract are borne by the proprietor. b) The firm’s growth may require more capital than the owner can purchase with his her own funds and it is difficult fora proprietorship to tap outside sources of funds. c) The legal life of a proprietorship comes to an end upon the proprietor’s death.
3.0 Partnership
This is an association of two or more people who operate a business as co-owners by voluntary legal agreement. It is the least common of major forms of business organisations. They are most common in professions such as Law, Medicine and Accountancy.
3.1 Framework within which Partnerships operate
 All partners have equal vote in how the business should be run
 All partners have invested equally in the business
 All partners have an equal share of profits and losses
 Partners will not receive a salary and
 Partners will not receive interest on their capital invested. Unless there is an agreement to the contrary, the law will assume this to be the casein the event of a dispute.

Technoprenuership1 16 Partnerships, unlike the sole trader, have to look beyond just their own liabilities. Each partner is jointly and severally responsible with other partners for all the obligations and debts of the partnership even where they exist directly as a result of another partner’s actions.

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