Question

Comparison of three essential types of businesses in Australia: use the following criteria and organize your comparison in a table:

1) Owner/s of businesses

2) Level of difficulty in setting up the business

3) Life the business (limited or unlimited)

4) Liabilities of owners over the business’s debts

5) Legal status of business

6) Level of difficulty in mobilizing funds

7) Level of difficulty in business transfer.

Answer 1

Comparison
s/rNo	Topic	Partnership	Sole Propritership	Trusts
1.	Owner/s of businesses	- Business to have more than one owner	- Business to have one owner.	- This is where the business is transferred to a third party who has legal control to run the business, and who distributes income and/or capital between the relevant Beneficiaries.
2.	Level of difficulty in setting up the business	- Diffirent Management style - Setting Boundaries - Difficult to add or remove partner - Commitment level	- Defficulties in Raising Capital - unlimited liablities - lack of expertise - Raised capital	- The trust deed limits a trustee’s powers. - It may be difficult to borrow funds based on the intricacies of loan structures.
3.	Life the business (limited or unlimited)	- limited life	-The owner and its business is the same entity and due to lack of successor or heir, the life of the business is limited.	- Unlimited life
4.	Liabilities of owners over the business’s debts	- Partners are personally liable for the business obligations of the partnership. - If a partner dies, or is made bankrupt, the partnership and creditors can claim the deceased partner’s share of the debt from their estate. - A person who joins a partnership will not be liable for the debts it built up before they joined, unless an agreement is made that says something different.	- A sole proprietorship is essentially just an individual doing business without the benefit of forming a legal entity such as a partnership or corporation. If you are operating a business yourself, and have not formed a corporation or any of the various entities within the realm of corporations, then you have a sole proprietorship. - No formal legal documents are required to form a sole proprietorship. Many sole proprietors, however, choose to register the company name with the secretary of state and obtain a separate tax identification number for the business.	- Tax planning -  Most people set up a trust in a way where the company is appointed as the trustee. - If a beneficiary is sued or incur debts in some way, creditors and litigators don’t have recourse to repossess their property or income. - Privacy
5.	Legal status of business	A partnership firm is not a legal entity apart from the partners constituting it. It has limited identity for the purpose of tax law as per section 4 of the Partnership Act of 1932	Comes under no specific act	-Trusts are widely used for investment and business purposes. A trust is an obligation imposed on a person or other entity to hold property for the benefit of beneficiaries. - While in legal terms a trust is a relationship not a legal entity, trusts are treated as taxpayer entities for the purposes of tax administration.
6.	Level of difficulty in mobilizing funds	- Strategy and Action Planning/Marketing. - Qualities of collaborating partners. - Processes of partnering.	- There's a limit on how much an individual can invest. For many sole proprietors, their savings will not be enough to cover the business' capital requirements.	- trust is widely recognised as existing for social good. This can assist with fundraising. - No equity investment
7.	Level of difficulty in business transfer	-Loss of Autonomy. - Emotional Issues - Future Selling Complications. - Lack of Stability.	- Heavy Decision-making Burden - unlimited liabilits	- Higher setup and operating costs - Donors becoming disconnected -Uninspired partnerships - Maintaining Trust