Intellectual Property

Patents

Advantages

Potential Profits
A patent holder can exclude the competition from recreating their product or service.
This allows them to sell the product or service at a higher profit margin.

Legal monopoly
Filing a patent gives the inventor a legal monopoly on selling, using, making,
distributing, importing, or exporting their creation for a specified time period. This
keeps others out of the market for the invention, which can be extremely profitable
and beneficial. When the patent expires, others will be able to use the new invention
as they see fit.

restrict the competition. 

Patenting an idea can also help to restrict the competition. A properly filed patent can
limit the competition's ability to produce the product and even allow the inventor to
demand that they cease production if they are producing the item as well and have
never patented it.

Patents can help businesses of all sizes to expand their market share. When filing a
patent, an inventory may have the ability to file it in other states where they plan to
sell, thus increasing their territory and the company's share of the market.

Disadvantages

Details of the invention are publicly disclosed. To file for a patent application, the
inventor is required to make public the technical information about the invention.
Depending on the invention, some inventors choose to not disclose this information
and keep the details of their product or service a trade secret.

The application process can be lengthy and time-consuming. It can take three to four
years for a patent application to be completed and granted. There is also the risk that
the market could change significantly over time or that technology could advance.

A patent is only good for the country it is issued in. Patent protection will only extend
to the country in which the patent is filed. If an inventor plans to produce, market, or
sell their product or service in a different country, they will be required to file a patent
application in each country to gain the afforded protection.

They bring the risk of lawsuits. When an inventor tries to patent an idea, competitors
may file suit in an attempt to invalidate the patent if they feel it can provide them with
benefits. Others may claim the patent infringes on their own patent, and they may try
to sue the inventor for an injunction or damages.
Pros:
1. Right to produce and reproduce: Copyrights gives the owner of the
intellectual property the right to produce and reproduce the copyrighted
material without any approval by law or by any legal enforcement.

2. Right to authorize: Copyrights gives the owner the rights to authorize

anyone to produce and and reproduce the intellectual property at any
time and anywhere. This means the owner has absolute rights.

3. Protection: Copyrights gives the owner of the intellectual property

protection over his works. This means that no one else besides the owner
can use the protected property by producing or reproducing.

4. Moral rights: Copyrights give the owner of the intellectual property

moral rights to do whatever they want with the property.

5. For a limited time only: Copyrights are granted to the owner of the

intellectual property for a limited time only. This means that during that
time of the protection, the owner can do whatever he wants to do with it.

Cons:
1. Limited dissemination: Copyrights are granted to the owner for a
limited amount of time. As soon as the time lapses, the copyrights are
taken away from the owner and anyone can now produce and reproduce
the works.

2. Cost: It is costly to file for copyright protection of any intellectual

property. There is a lot of money required to file for the intellectual
property.
3. Limited protection: The protection granted by the copyright may not
be comprehensive. It is sometime limited and may not allow for a lot of
modification of the intellectual property.

4. Inability to share work: There is the problem of inability to share the

works that are supported under the intellectual property.

5. Authorship is not ownership: The protection offered by the copyright

may allow for production and reproduction of the content but may not
necessarily give the owner the full rights of ownership.

List of Advantages of Sole Proprietorship

1. No Boss
One of the reasons entrepreneurs prefer sole proprietorship over other business
structures is not having to be accountable to any boss or supervisor since he or she is
the owner of the company. This means that the entrepreneur himself is the one at the
helm of the business and decisions are made solely by him. There is no need to wait
for a go-signal from other people to implement new rules and regulations. This
privilege can prove to be useful during emergencies and decisions are needed right
away.

2. Low Start-up Costs

Sole proprietorship ranges from having no employees and up to a number of
employees which is easier to deal with in terms of expenses, taxes and compensation.
Costs of opening a business with this structure do not require costly legal expenses as
well as corporate taxes. Moreover, if the business only has few employees, health care
insurance coverage is not really an obligation of the business owner. As for bonuses
and incentives, there will be lesser people to pay.

3. Profit
One of the perks of sole proprietorship is that the owner can keep all the profits to
himself unlike if he is on a partnership with another individual or if he has a
corporation with investors where profits will be divided among themselves.

4. Total Business Control

Business owners who are sole proprietors can make quick decisions as well as have
complete control on how to manage the business. This can be beneficial to the
entrepreneur since the owner does not have to discuss issues with business partners
and will be able to handle complicated problems without someone else disagreeing or
debating his proposed solutions. Also, if wrong decisions are made, the sole
proprietor only has himself to blame.
5. Easy Process
Apart from the lesser requirements in forming sole proprietorship like applying for the
name of the business and opening a bank account with only one signatory, changing
business structures is also less complicated in sole proprietorship. If the owner
decides to incorporate the business or change it into a partnership, he or she can easily
decide to do so, without having to consult with other signatories and co-owners. And
if after some time the owner decides to apply for business closure or stop operations,
documents required and the process are lesser and simpler.

List of Disadvantages of Sole Proprietorship

1. Personal and Business Assets

One of the drawbacks of sole proprietorship is that the owner’s money is tied to his
business in the sense that finances of the owner and the business are one and the same
and that there is no legal separation between the two. If the owner’s business
encounters a problem or incurs debt and other obligations, he can risk losing his
personal money to settle these issues.
2. 2. Less Capital
The flipside of not having partners or other investors in a business is not being able to
come up with a large amount of capital to start and sustain the company. Even if the
business idea is feasible and looks lucrative, coming up with a substantial amount of
money to get the business going can be difficult after some time if there is no
additional capital. Unlike in a corporation where there are investors who can make
additional investments should the need arises, sole proprietorship often results to
some owners relying on their personal money and loans to operate the business.

3. Decision-Making
Being the only one to make decisions has its advantages and disadvantages. If
problems encountered are complex, it helps to brainstorm with like-minded people
whose interest centers on making the business profitable. When it comes to making
serious decisions, there will be different views which will provide balance in the
management.

4. Work Life Balance

Sole owners of businesses often find it hard to go on vacations since they have to look
over the company. This can be a setback since their personal life and family can suffer
because of too much work and pressure running the company. And in instances where
the owner happens to get away from work for a holiday, he or she still has to monitor
or be on top of the business especially in times of problems.

5. Taxes
Another drawback of single-handedly owning and running a business is paying taxes
personally. Since the business and the owner are one and the same, owner has to pay
taxes as self-employed. On the other hand, if the business name is different from the
owner’s name, the money to be used for paying the taxes will still come from the
business owner. Also, some tax benefits are not given to sole proprietors such as
health insurance benefits for employees. In the instance that the owner dies, the
business becomes part of the owner’s estate. Consequently, it will be subject to
inheritance taxes if there are beneficiaries, they might be dealing with paying costly
taxes.

Advantages of Partnership

 Capital – Due to the nature of the business, the partners will fund the
business with start up capital. This means that the more partners there
are, the more money they can put into the business, which will allow
better flexibility and more potential for growth. It also means more
potential profit, which will be equally shared between the partners.
 Flexibility – A partnership is generally easier to form, manage and run.
They are less strictly regulated than companies, in terms of the laws
governing the formation and because the partners have the only say in the
way the business is run (without interference by shareholders) they are
far more flexible in terms of management, as long as all the partners can
agree.
 Shared Responsibility – Partners can share the responsibility of the
running of the business. This will allow them to make the most of their
abilities. Rather than splitting the management and taking an equal share
of each business task, they might well split the work according to their
skills. So if one partner is good with figures, they might deal with the
book keeping and accounts, while the other partner might have a flare for
sales and therefore be the main sales person for the business.
 Decision Making – Partners share the decision making and can help each
other out when they need to. More partners means more brains that can
be picked for business ideas and for the solving of problems that the
business encounters.

Disadvantages of Partnership

 Disagreements – One of the most obvious disadvantages of partnership

is the danger of disagreements between the partners. Obviously people
are likely to have different ideas on how the business should be run, who
should be doing what and what the best interests of the business are. This
can lead to disagreements and disputes which might not only harm the
business, but also the relationship of those involved. This is why it is
always advisable to draft a deed of partnership during the formation
period to ensure that everyone is aware of what procedures will be in
place in case of disagreement and what will happen if the partnership is
dissolved.
 Agreement – Because the partnership is jointly run, it is necessary that
all the partners agree with things that are being done. This means that in
some circumstances there are less freedoms with regards to the
management of the business. Especially compared to sole traders.
 However, there is still more flexibility than with limited companies
where the directors must bow to the will of the members (shareholders).
 Liability – Ordinary Partnerships are subject to unlimited liability, which
means that each of the partners shares the liability and financial risks of
the business. Which can be off putting for some people. This can be
countered by the formation of a limited liability partnership, which
benefits from the advantages of limited liability granted to limited
companies, while still taking advantage of the flexibility of the
partnership model.
 Taxation – One of the major disadvantages of partnership, taxation laws
mean that partners must pay tax in the same way as sole traders, each
submitting a Self Assessment tax return each year. They are also required
to register as self employed with HM Revenue & Customs. The current
laws mean that if the partnership (and the partners) bring in more than a
certain level, then they are subject to greater levels of personal taxation
than they would be in a limited company. This means that in most cases
setting up a limited company would be more beneficial as the taxation
laws are more favourable (see our article on the Advantages and
Disadvantages of a Limited Company ).
 Profit Sharing – Partners share the profits equally. This can lead to
inconsistency where one or more partners aren’t putting a fair share of
effort into the running or management of the business, but still reaping
the rewards.

Company

1. Accumulation of Large Resources:

The main drawback of the sole trade and partnership concerns has been the scarcity of

resources. The resources of a sole trader and of partners being limited, these

enterprises have always suffered for want of funds. A company can collect large sum

of money from large number of shareholders. There is no limit on the number of

shareholders in a public company. If need for more funds arises, the number of

shareholders can be increased. Joint stock companies are suitable for those businesses

where large resources are required.

2. Limited Liability:

The liability of members in a company form of organisation is limited to the nominal

value of the shares they have acquired. If a person has purchased a share of Rs. 100,

his liability is limited to Rs. 100 only. If the share is partly paid, then he can be
required to pay only the unpaid value of the share. In no case the total payment will

exceed Rs. 100. The limited liability encourages many persons to invest in shares of

joint stock companies. Many persons will be reluctant to invest in those enterprises

where liability is unlimited.

3. Continuity of Existence:

When a company is incorporated, it becomes a separate legal entity. It is an entity

with perpetual succession. The members of a company may go on changing from time

to time but that does not affect the continuity of a company. The death or insolvency

of members does not in any way affect the corporate existence of the company. The

continuity of a company is not only in the interests of the members but is also

beneficial for the society. The discontinuation of a company may cause wastage of

resources and inconvenience to the consumers.

4. Efficient Management:

In company form of organisation, ownership is separate from management. It enables

the company to appoint expert and qualified persons for managing various business

functions. The availability of large-scale resources enables the company to attract

talented persons by offering them higher salaries and better career opportunities. The

efficient management will help the company to expand and diversify its activities.

5. Economies of Large Scale Production:

With the availability of large resources, the company can organise production on a big

scale. The increase in scale and size of the business will result in economies in

production, purchase, marketing and management, etc. These economies will enable

the company to produce goods at a lower cost, thus resulting in more profits. The

company will help consumers by providing them with cheaper goods and will also be

able to accumulate more resources for further expansion.

The company form of organisation suffers from the following drawbacks:

1. Difficulty of Formation:

Promotion of a company is not an easy task. A number of stages are involved in

company promotion. The suitability of a particular type of business is to be decided

first. A number of persons should be ready to associate for getting a company

incorporated. A lot of legal formalities are required to be performed at the time of

registration. The shares will have to be sold during the particular time. Promotion of a

company is both expensive and riskly.

2. Separation of Ownership and Management:

The ownership and management of public company is in different hands. The owners

i.e., shareholders play an insignificant role in the working of the company. On the

other hand, control is in the hands of those who have no stakes in the company. The

management may indulge in speculative business activities. There is no direct

relationship between efforts and rewards. The profits of the company belong to
shareholders and the Board of Directors are paid only a commission. The

management does not take personal interest in the working of the company as is the

case in partnership and sole-trade business.

3. Evils of Factory System:

The company form of organisation leads to large-scale production. The evils of

factory system like insanitation, air pollution, congestion of cities are attributed to

joint stock companies. Joint stock companies facilitate formation of business

combinations which ultimately leads to the monopolistic control and exploitation of

consumers.
Here are some of the key networking benefits:

1.   Strength business connections

Networking is about sharing, not taking. It is about forming trust and helping one
another toward goals. Regularly engaging with their contacts and finding
opportunities to assist them helps to strengthen the relationship. By doing this, they
sow the seeds for reciprocal assistance when need help to achieve their goals.

2.   Get fresh ideas

Network can be an excellent source of new perspectives and ideas to help them in
their role. Exchanging information on challenges, experiences and goals is a key
benefit of networking because it allows them to gain new insights that they may not
have otherwise thought of. Similarly, offering helpful ideas to a contact is an excellent
way to build their reputation as an innovative thinker.

3.   Advance their career

Being visible and getting noticed is a benefit of networking that’s essential in career
building. Regularly attending professional and social events will help to get their face
known. They can then help to build their reputation as being knowledgeable, reliable
and supportive by offering useful information or tips to people who need it.

4.   Get access to job opportunities

Expanding their contacts can open doors to new opportunities for business, career
advancement, personal growth, or simply new knowledge. Active networking helps to
keep them top of mind when opportunities such as job openings arise and increases
their likelihood of receiving introductions to potentially relevant people or even a
referral.

5.   Interconnected business contacts = more knowledge

Networking is a great opportunity to exchange best practice knowledge, learn about

the business techniques of their peers and stay abreast of the latest industry
developments. A wide network of informed, interconnected contacts means broader
access to new and valuable information.