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Introduction
A sole proprietorship is an organization that has one owner who deals with the companies needs like paying for the income tax. Also, it does not get support from the government and also the simplest to form. Moreover, the sole proprietorship has different benefits and disadvantages just to mention a few the formation of the business is not hard and one is his or her boss. However, the disadvantage is that one pays tax personally. Also, Welch cannot be held responsible for the unpaid debt because they are limited liability partners because according to the law all the partners are individually responsible for their acts and commissions. Also, the law states that each partner is responsible for what he does be it taking of debts and liabilities.
As described earlier, a sole proprietor is responsible for their benefits and the control of their business.
Why Sole Proprietorship is Best Suited for Its Needs
The organization is best suited for it needs because its formation is easy, does not require a lot of profit to start a business. Furthermore, the person is the owner of the firm and also responsible for the operation of the companies and the financial accountabilities. Additionally, there is quick record keeping regarding the business’s profits and losses. The business does not have many regulations in the sole proprietor's business. Also, they do not pay company taxes as well as proper handling of the money the business incurs (Nickels, McHugh & McHugh, 2010)
Why Sole Proprietorship is Not Suited for Its Needs
It is not advantageous because it is an unlimited liability because it is responsible for its debts and the activities of the enterprise (Nickels, McHugh & McHugh, 2010). The business has immense responsibility and is at risk and supposed to pay for all the inconveniences done by his company be it the debts or losses by his personal assets. Also, the sole proprietor does not have any means of getting loans and the monetary funds. The lack of specialization is also a problem to the business because the entrepreneur does not know how to handle any other activities except the one he or she is majoring on.
Learning Activity #2
Fact Pattern
The fact pattern is that Dunn and Welch are partners, but they are both liable for what they do. The partnership between Dunn and Welch is known as the Limited Liability Partnership (LLP). According to LLP, the partners enjoy some protection against individual liability; that is to say, any partner who does something on his will or actions in the business like debts. Additionally, in LLP individuals have equal rights and each partner is accountable with the liabilities enforced by rules ascending in their actions (Keatinge, Donn, Coleman, & Hester, 1995).
Possible Causes of Action
According to the law guiding LLP, every person is subjected to the actions they take and make. Also, the main aim of the law is to protect the partners from having to pay for the troubles made by their partners thus safeguarding the rights of the individual partners (Keatinge, Donn, Coleman & Hester, 1995). Therefore, Welch cannot be held responsible given the fact that he might be the overall controller of the enterprise. The law covers Welch and clearly shows that Dunn is liable for the debt and the one responsible for the payment of the business.
In conclusion, a sole proprietorship is nice for it creates employment for the individuals and makes them useful. Moreover, sole proprietors should not entirely concentrate on their business but also venture in different aspects for the growth of the firm and its success in the market and profits. Seemingly, the laws that govern limited liability partnership is an excellent opportunity and advantageous because it protects them and the individual partners operation in the business by making each of them responsible for their activities.
References
Keatinge, R. R., Donn, A. G., Coleman, G. W., & Hester, E. G. (1995). Limited Liability Partnerships: The Next Step in the Evolution of the Unincorporated Business Organization. The Business Lawyer, 147-207.
Nickels, W. G., McHugh, J., & McHugh, S. (2010). Understanding Business 9th ed.
