Advantages of Business Forms
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What are the advantages and disadvantages of the various business forms? What impact does the form of a business have on its profitability and the availability of funds? what is the relationship between a business form and its ability to raise capital?
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Solution Summary
The solution discusses the advantages and disadvantages of the various business forms. The impacts which the forms of a business have in its profitability and the availability of funds is determined.
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Sole Proprietorship
This organization is owned by single person and is the simplest form of organization. He is fully responsible for all debts and obligations related to his or her business and have got unlimited liability.
Advantages
? Ease of formation
? Low start-up costs
? Less administrative paperwork than some other organizational structures (such as incorporation)
Disadvantages
? Difficulty raising capital
? Unlimited liability
? Lack of continuity in business organization in the absence of the owner
http://www.cbsc.org/servlet/ContentServer?pagename=CBSC_ON%2Fdisplay〈=en&cid=1085667968842&c=GuideFactSheet as retrieved on 25 Aug 2006 05:13:20 GMT.
2. Partnership
A partnership (also referred to as a general partnership) is a business arrangement where two or more people (who are not husband and wife) are owners of a business. Unlike a corporation, you do not need to file any documents with the state to make your business a partnership. A partnership is created by default, unless the business is specifically formed as some other type of business entity, such as a corporation, a limited liability company, or a limited partnership. Partners in a general partnership ...
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