After reading this article you will learn about the limitations of sole proprietorship with measures to overcome it. Limitations of Sole Proprietorship: When the business of a sole trader continues to expand, he has to face the following limitations: 1. Lack of Capital: As the sole proprietor has got a limited capital which he has already invested in the business, [...]
A sole trading business is started on a small scale. With the passage of time, the business expands and faces additional problems of capital and management of business. Under such circumstances two alternative options are open to him, which are as follows: (a) To take a partner (b) To engage an assistant or servant. Option # 1. Taking a Partner: [...]
There are different kinds of partners and they may be classified in the following manner: 1. Active Partner 2. Sleeping or Dormant Partner 3. Nominal Partner 4. Partner in Profits Only 5. Minor as a Partner 6. Incoming Partner 7. Outgoing Partner 8. Partner by Estoppel or Holding Out. Kind # 1. Active Partner: A partner who is actively engaged [...]