Question

Define and Explain the Differences Between:  Sole Proprietorships Companies  Partnerships  Joint Venture Companies In terms of the following: 1. Legal Status 2. Dividend Payment 3. Voting Rights 4. Liquidation

Answer 1

Parameters	Sole Proprietorship	Partnership	Joint venture
1. Legal status	No separate legal entity, distinct from its owner.	It is governed by partnership act and is not a legal entity.	It is not a legal entity.
2. Dividend payment	They cannot pay dividend, because they don't issue shares.	They cannot pay dividend, because they don't issue shares.	Dividends are paid by joint venture companies.
3. Voting rights	Decisions made independently by owner himself.	Normally one vote per person.	Voting rights in joint venture depends on different types of shares and class of shares isssued by them.
4. Liquidation	A sole proprietor can liquidate his firm any time, as he is the owner and the liability is limited to him.	A partnership is is liquidated in 3 steps, in order to pay off the debt. It requires consent of all partners or it can be forced by creditors.	A joint venture can be liquidated by words of parties, at will or by conducts. The creditors are first paid off and then the remaining fund is distributed among them.