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  • Date Submitted: 03/22/2014 03:52 AM
  • Flesch-Kincaid Score: 46.8 
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accounting assignment 1
1. choosing an appropriate business structure is the first step of success for individuals contemplating commencing a business.
sole trader-Individual who controls and manages a business, and is solely liable for all the business debts.
basically, a sole trader needs to complete the general registration requirements applying to all new businesses. eg, applying for an Australian Business Number (ABN). An ABN is an identifying number for dealings with the Australian Taxation Office (ATO) and other government departments and agencies. If solo trader business has a GST turnover of $75000 or more, then the business must also register for the goods and services tax (GST).
For tax purpose, the income of the sole trader is treated as the sole trader's individual income, so that individual owner is responsible for paying tax on the income.
Advantages of sole trader
1.sole trader entity is a quick, inexpensive and easy form of business to establish, and also easy to wind down.
2.sole trader is not subject to company regulation
3. no need to pay separate income tax
4.the sole business owner has total autonomy over business decisions, and therefore free to choose the direction , strategies and policies.
5. owner can claims all the profits and all after-tax gains if the sole trader business is sold.
disadvantage:
1. the individual owner has unlimited liability, which means full responsibility for the business debts and legal actions.
2. sole trader is limited by the skill, time and investments which means restricted by owner's funds if owner want to extend business.
3. sole trader can be restrictive for those government-related business opportunity.
4. sole trader ultimately responsible for the loss and no offset with others.

Partnership-Group of people who come together in business with a common goal of making a profit, and share profits or losses according to the ownership structures outlined in agreement.
advantage:
1. like sole...

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