Business structure has different economic, legal and tax consequences. As a result, please explain the tax advantages and disadvantages of running a business as a sole trader, a partnership, and a limited company.

Business structure has different economic, legal and tax consequences. As a result, please explain the tax advantages and disadvantages of running a business as a sole trader, a partnership, and a limited company.

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Question

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

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Step 1: Define Business structure.

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Step 2: Advantages and disadvantages of running a business as a Sole trader.

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Step 3: Advantages and disadvantages of running a business in a partnership.

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Step 4: Advantages and disadvantages of running a business in a Limited company.

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