a. Differentiate between a sole proprietorship and a partnership b. List four characteristics of a...

Explanation

a. A sole proprietorship is a business model where an individual is an owner as well as the operator of the business whereas a partnership is a business organization where two or more persons agree to carry on business and share profits and losses equally.

b.

- sole owner of the business

- unlimited liability

- no legal entity

- sole decision maker

- main objective is to make profit

c.

- legal entity: Public limited liability companies have legal existence. They have a distinct personality from the owners, hence they can be sue and be sued in their own name.

- Large capital: They can raise enough capital by selling more shares or debentures to the public.

- Loan facilities: Many banks prefer to grant loans to public limited companies than other forms of business units because there is no likelihood of default in payment.

- Spreading risks of ownership: Public limited company allows for public and unlimited membership, the risk of ownership is then spread amongst many people as opposed to being centered on a few as in the case of a private limited company.