| Drawbacks of unincorporated business : | |
| (1) | business owner (or partners) being responsible for all losses and liabilities arising from business |
| (2) | assets of the business and owner (or partners) being unable to be legally segregated |
| (3) | business owner (or partners) has legal responsibility for his business and staff |
| (4) | evaporation of business operating right vested in business owner (or partners) upon death or bankruptcy |
| (5) | product brand of a business being rather difficult to be transferred to other party |
| (6) | negative credibility of the business owner or individual partner has strong repercussion on the credibility of the business |
| (7) | banks in approving credit facilities place strong reliance on financial position of the business owner than the past performance of the business |
| (8) | financial statements of "unincorporated business" lack credibility and acceptability |
| (9) | comparatively difficult in raising funds for "unincorporated business" |
| (10) | suppliers normally refuse giving credit to "unincorporated business" due to uncertainty about the latter's financial position. |