Four Types of Business Entities-Advantages & Disadvantages
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There are several types of legal forms for Business Entities. Discuss four types of business entities.
In your discussion please include a response to the following bullet points for each type of business entity you selected.
2 Advantages of this type
2 Disadvantages of this type
Finally select your current or a previous employer and answer the following,
Give a real life example of one of your advantages or disadvantages that you listed above.
Select another type of business entity and discuss if it would be better or worse at handling the example you gave.
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Solution Summary
The answer contains in detail the meaning, advantages, disadvantages of four legal forms of business entities.
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There are various types of legal entities:
1. Sole proprietorship
2. Un and registered partnership
3. Public limited corporation
4. Private limited corporation
1. Sole proprietorship
Here, the individual puts his own money and start the business. He is ultimately responsible for the success or failure of the business. If the business yields profit, then he will get the profit. If the business runs into loss, then he has to bear the loss.
Advantages:
1. The owner of the business has the ultimate control over the affairs of the business.
2. The owner can make any decisions as per his own wish/without any intervention from any outside agency. He enjoys freedom in the management of the affairs of the business.
3. There is no need to for the sole proprietor to follow so many laws like provisions of the law pertaining to the corporations and he has to file his income tax return stating his income or loss unlike corporations which has to file many returns.
Disadvantages of sole proprietorship:
1. Since only one individual is contributing the money, the scale of operations is very small. Since the scale of operations of ...
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