Citation Essay Example | Topics and Well Written Essays - 750 words

Citation - Essay Example Partnership is also an inexpensive way of starting up a business. Although taxation of a partnership is more complex than sole-trader, partnership itself does not have to pay any taxes to the U.S government. The partnership is only required to file information to the U.S government on how many profits and losses were earned or incurred by the business and how were these profits and losses distributed among the partners. Secondly when there are two or more partners involved the ability to raise the finance for the business increases. The plan indicates that $300000 will be raised from personal savings, but the financial burden on an individual entrepreneur will decrease if he involves one or more partners. By forming a Partnership, it gives a different perspective on how to run the business, and the partners can complement each other by combining the variety of individual skills. For example one partner who has a strong background in Finance can look after the financial aspects of the business and the other partner who has good marketing and HR skills can manage the Marketing and HR aspects of the business. This helps in easing the pressure of running the business on any one individual and the partners can use their skills, knowledge and contacts in the business in a more useful manner which is beneficial for the business and help in earning profits. Partnership can also be very cost-effective as the partners can specialize in different aspects of the business. By specializing in different areas of the business they can effectively and efficiently use the resources. The main disadvantage of being a sole trader is unlimited liability. If the business suffers losses, then all the losses have to be beard by the sole trader and he may also have to sell of his assets to pay of bank loans or money borrowed from various investors. Although ‘JBR Collections’ will be financed through personal savings but there