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SOLE PROPRIETORSHIP

CONTENT• LEGAL DEFINITION

• NATURE AND CHARACTERISTICS

• ADVANTAGES AND DISADVANTAGES

• EXMPLE OF COMPANY

DEFINITION ,NATURE

AND CHARACTERISTICS

OF SOLE

PROPRIETORSHIP

• Sole proprietorship is the simplest form of business organisation. It is owned by one person, but it need not be operated by that person alone. A sole proprietorship can even have large numbers of employees.

• Many sole proprietors start business under their own names because creating a separate business or trade name isn't necessary.

• Personal assets, personal income and employment income are all liable. All profits flow directly to the owner of a sole proprietorship.

DEFINITION OF SOLE PROPRIETORSHIP

NATURE AND CHARACTERISTICS

1. Easy Formation and Dissolution• Can be easily formation and

dissolution, as there are no legal formalities involved in it.

2. Easily Transferable• Easily be transferred to another person without any restriction.

3. Relationship with customers• The proprietor tries to keep good relationship with his

customers. High values of good will be ordered if the customers know the proprietor well.

NATURE AND CHARACTERISTICS

4. Freedom of Action• In sole proprietorship, single owner is the sole master of the

business, therefore, he has full freedom to take action or decision.

5. Legal Entity• The business has no separate legal entity apart from the sole

traders.6. Legal Restriction• No legal restrictions for sole traders to set up the business. But there may be legal restrictions for setting up

a particular type of business.7. Management• The control of management of the business lies with the sole

owner.

8. Ownership• The ownership of business in sole proprietorship is owned by

one person.9. Profit• The single owner bears full risk of business, therefore, he/she gets total benefit of the business as well as total loss.10. Size• The size of business is usually small.

NATURE AND CHARACTERISTICS

11. Secrecy• A sole proprietorship can easily maintain the s

ecrecy of his business.

12. Risk• The proprietor bears all the risks himself.

NATURE AND CHARACTERISTICS

ADVANTAGES AND

DISADVANTAGES OF

SOLE PROPRIETORSHIP

Advantages of Sole Proprietorship

 A) Less paperwork & additional formalities.(registration is easy, fast and fewer documents are needed)

B) Price of entity formation is much cheaper and is not required by the Malaysian government to be audited.

C) Not required to disclose financial statements to the public.

D) Easy to convert into limited company. (SDN BHD)

E) A sole proprietor has complete control and decision-making power over the business. Owners may freely mix business or personal assets.

F) All profits will be your personal property.

G) No reports of accounts are required.

H) Sole proprietor only need to pay personal income tax and not business tax.

Advantages of Sole Proprietorship

• The sole proprietor of the business must be able to hold for the debts and obligations of the business personally.

• All responsibilities and business decisions fall on the shoulders of the sole proprietor.

Disadvantages of Sole Proprietorship

Disadvantages of Sole Proprietorship

• Investors won't usually invest in sole proprietorships.

• The death or prolonged illness of the sole proprietor will lead to the end of the business.

• Due to the limitations of a one-person business, the sole proprietor may not be able to raise additional capital from outside sources to expand the business.

EXAMPLE OF SOLE PROPRIETORSHIP

COMPANY :

WOOI ARCHITECT

• Established in November 1996.

• Main focus on individual residences, interior architecture and purpose design offices.

• Lok Wooi, the principal of the firm, personally involved in the projects from design conception to final construction of the building.

• Works recognized and published both locally and internationally.

Wooi Architect

• Principal, Wooi Architect• Project involvement:• Exclusive Bungalows, Cooperate Office Headquarter and

Mixed Development and Master planning.September

1996 until now

• Architect Assistant, H. Stossel and Partners, Sydney, Australia 1987-1989

• Architect, Hoffer Reid and Coombs Architects, Sydney, Australia Senior Architect, CSL Design S/B, Malaysia

• Project involvement:• -Design and Implementation 565 Room Urban Hotel, Club

House, Casino and High-rise Apartments, Shopping Arcade.1989-1991

Wooi Architect (Con’t)Professional experience

•Senior Architect, CSL Design S/B, Malaysia•Project involvement:•-Project Architect for 25 Storey High-rise Corporate Office, Resorts, Bungalows and Renovation.1991-1996

•Director of CSL Design S/B Malaysia•Project involvement:•-Resorts, luxury Condominium Hospital, Bank Corporate HQ, Offices, Bungalows. In charge of Architectural Department including concept, planning and project implementation.

March 1996-August 1996

Wooi Architect (Con’t)

Awards, Academies and Publications

Wooi Architect (Con’t)

1993-1996 -Invited as a guest critic occasion to Universiti Teknologi Malaysia and Institute Teknologi Mara (ITM)

1999 -Invited as a guest lecturer for one semester in Universiti Malaya, Kuala Lumpur -Invited as quest critic to Lim Kok Wing Institute of Creative Technology (LKCT School of Architecture)

2000-2003 -Invited as a guest lecturer and external critic in Universiti Malaya, Universiti Putera Malaysia & Universiti Islam Antarabangsa -Member of organizing committee for WCTE 2002 (World Conference on Timber Engineering) -Speaker at Conference on Forestry and Forest Product Research (CFFPR) 2003

Wooi Architect (Con’t)2004

-PAM (Malaysian Institute of Architects) Awards for Excellence in Architecture for Single Residential Buildings

2005 -Speaker at Datum KL: 2005 (International Architectural Forum)

2006

-Appointed as The Convener for PAM Awards December

-Runner up in Cityscape Architectural Review Award 2006 for Residential (built) category

2007

-Speaker at World Architecture Congress (Cityscape Asia) on experiencing Tropical Spaces

The company organization

• Wooi Architect is quite well known in Architect field.

• Interviewed by some magazines and books about architectural design for few times.

• Small modeled consultant firm. • Advantages

-Mr. Wooi working in home office instead of company, so he can have the maximum profits in all his projects.

• Disadvantages-The only worker of the company.-The efficiency has become limited.

Wooi Architect (Con’t)

• http://www.nytimes.com/allbusiness/AB4113314_primary.html

• http://www.malaysia.gov.my/EN/Relevant%20Topics/MakeaBusiness/Business/PlanBusiness/FormsOfBusiness/SoleProprietorship/Pages/SoleProprietorship.aspx

• http://www.investopedia.com/terms/s/soleproprietorship.asp#axzz2K193efTe

• http://www.informationbible.com/article-sole-proprietorship-and-its-characteristics-49.html

REFERENCE

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