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Entrepreneurial forms

Define each of the following forms and address the advantages and disadvantage of each:
a. Sole proprietorships
b. Partnerships
c. Corporations
d. Limited liability companies

Answer the following question and explain your answer: What is the most appropriate form of ownership for an aggressive entrepreneurial firm?

Solution Preview

A sole proprietorship is a business owned and operated by one person and the law does not separate the owner and the business. The sole proprietor gets all the profits and has unlimited liability. The advantage is close control, fast decision-making, high motivation, and easy formation. The disadvantages are unlimited liability, limited resources, limited ability to manage, and limited certainty of continuity. It is not easy to realize economies of scale.

A partnership is formed with a contract where individuals called partners agree to share profits and losses. The partnership is based on trust, equality and mutual respect. The advantages are the ease of formation, a synergy of skills of two or more people, each partner can specialize, and with more ...

Solution Summary

Different forms of businesses are explained in a structured manner in this response. The answer includes references used.

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