ADVANTAGES AND DISADVANTAGES OF FORMAL BUSINESSES

 These are businesses which are registered with the Registrar of Companies. For a person to start such a business, he/she must be aware of the licenses, labour laws, taxes and permits required to avoid breaking the country’s laws.

ADVANTAGES OF FORMAL BUSINESSES

1. They are legally recognized.

2. They are properly organized.

3. It is easy for them to get loans from financial institutions.

4. They have a sound base for further growth and development.

5. They are reliable and somehow permanent and therefore it is easy to get skilled human resources.


DISADVANTAGES OF FORMAL BUSINESSES

1. They are always governed by laws and rigid regulations.

2. They are not adaptable to changes.

3. They are not easy to start because of the involved procedural formalities.

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