Business Organizations
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Describe the advantages and disadvantages of doing business as a sole proprietor? When would you decide to start a sole proprietorship?
Describe the advantages and disadvantages of doing business as a partnership? When would you decide to start a partnership?
Describe the advantages and disadvantages of doing business as a limited liability company? When would you decide to start an LLC?
Describe the advantages and disadvantages of doing business as a corporation? When would you decide to start a corporation?
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Solution Summary
Describes advantages/disadvantages of business organizations. Including: sole proprietorship, partnership, limiited liability company and corporation.
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1. ADVANTAGES - SOLE PROPRIETOR
• A sole proprietor has complete control and decision-making power over the business.
• Sale or transfer can take place at the discretion of the sole proprietor.
• No corporate tax payments.
• Minimal legal costs to forming a sole proprietorship.
• Few formal business requirements.
DISADVANTAGES - SOLE PROPRIETOR
• The sole proprietor of the business can be held personally liable for the debts and obligations of the business. Additionally, this risk extends to any liabilities incurred as a result of acts committed by employees of the company.
• All responsibilities and business decisions fall on the shoulders of the sole proprietor.
• Investors won't usually invest in sole proprietorships.
A sole proprietorship would be ideal if you wanted to go into business alone.
2. ADVANTAGES - PARTNERSHIP
• You have a shared financial commitment.
• You can pool resources, expertise, and strengths.
• There are limited startup costs.
• There are few ...
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