1. Sole Proprietorship/Trader: This is the simplest form of business organization where the business is owned and run by a single individual. The owner is solely responsible for all the decisions related to the business and enjoys all the profits. However, they also bear all the risks and liabilities. There is no legal distinction between the owner and the business, meaning the owner's personal assets can be used to pay off business debts.

2. Partnership: A partnership is a business organization where two or more individuals share the ownership. Each partner contributes to all aspects of the business, including money, property, labor or skill. In return, each partner shares in the profits and losses of the business. The partners are personally liable for the business debts and if one partner makes a mistake, all partners are held responsible.

3. Company: A company is a legal entity separate from its owners (shareholders). It has rights and responsibilities just like a person. It can own property, enter into contracts, sue and be sued. The owners of a company are not personally liable for the company's debts. The company is run by directors who are elected by the shareholders. The profits of the company can be distributed to the shareholders as dividends.

In contrast to sole proprietorships and partnerships, setting up a company involves a more complex process including registration, ongoing reporting and payment of fees. However, it offers limited liability, which can be a significant advantage.

In summary, sole proprietorships are easy to set up and give the owner complete control, but come with unlimited liability. Partnerships allow for shared responsibility and resources, but partners are jointly liable for all debts. Companies offer limited liability and continuity of existence, but are more complex and costly to establish and run.

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1. Sole Proprietorship/Trader: This is the simplest form of business organization where the business is owned and run by a single individual. The owner is solely responsible for all the decisions related to the business and enjoys all the profits. However, they also bear all the risks and liabilities. There is no legal distinction between the owner and the business, meaning the owner's personal assets can be used to pay off business debts.

2. Partnership: A partnership is a business organization where two or more individuals share the ownership. Each partner contributes to all aspects of the business, including money, property, labor or skill. In return, each partner shares in the profits and losses of the business. The partners are personally liable for the business debts and if one partner makes a mistake, all partners are held responsible.

3. Company: A company is a legal entity separate from its owners (shareholders). It has rights and responsibilities just like a person. It can own property, enter into contracts, sue and be sued. The owners of a company are not personally liable for the company's debts. The company is run by directors who are elected by the shareholders. The profits of the company can be distributed to the shareholders as dividends.

In contrast to sole proprietorships and partnerships, setting up a company involves a more complex process including registration, ongoing reporting and payment of fees. However, it offers limited liability, which can be a significant advantage.

In summary, sole proprietorships are easy to set up and give the owner complete control, but come with unlimited liability. Partnerships allow for shared responsibility and resources, but partners are jointly liable for all debts. Companies offer limited liability and continuity of existence, but are more complex and costly to establish and run.

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1. Sole Proprietorship/Trader: This is the simplest form of business organization where the business is owned and run by a single individual. The owner is solely responsible for all the decisions related to the business and enjoys all the profits. However, they also bear all the risks and liabilities. There is no legal distinction between the owner and the business, meaning the owner's personal assets can be used to pay off business debts.

2. Partnership: A partnership is a business organization where two or more individuals share the ownership. Each partner contributes to all aspects of the business, including money, property, labor or skill. In return, each partner shares in the profits and losses of the business. The partners are personally liable for the business debts and if one partner makes a mistake, all partners are held responsible.

3. Company: A company is a legal entity separate from its owners (shareholders). It has rights and responsibilities just like a person. It can own property, enter into contracts, sue and be sued. The owners of a company are not personally liable for the company's debts. The company is run by directors who are elected by the shareholders. The profits of the company can be distributed to the shareholders as dividends.

In contrast to sole proprietorships and partnerships, setting up a company involves a more complex process including registration, ongoing reporting and payment of fees. However, it offers limited liability, which can be a significant advantage.

In summary, sole proprietorships are easy to set up and give the owner complete control, but come with unlimited liability. Partnerships allow for shared responsibility and resources, but partners are jointly liable for all debts. Companies offer limited liability and continuity of existence, but are more complex and costly to establish and run.

Compare and contrast the three main forms of business organisation: 'Sole proprietorship/trader', 'Partnership', and 'Company' by discussing the key characteristics of each form. (6 marks)

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