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Do you think agency problems arise in sole proprietorships and/or partnerships?

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Discussion of basic concepts

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 ...

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Do you think agency problems arise in sole proprietorships and/or partnerships?

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