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    The three forms of business organization and the advantages and disadvantages of each form

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    What are the three forms of business organization?

    What are the advantages and disadvantages of each form?

    For a corporation, what is the overall goal of the financial manager?

    What is the objective of this firm?

    Do you agree with this goal?

    Why or why not?

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    Solution Preview

    What are the three forms of business organization?
    There are three main forms of business organization: sole proprietorship, partnership, and corporation.
    1. Sole Proprietorship: Sole proprietorship is a method of owning a business in which one person owns the entire business and reports all profits and losses directly on his or her personal income tax return, as contrasted with corporate, joint or partnership ownership. A sole or individual proprietorship is easy to organize and flexible to operate.
    2. Partnership: Partnership is a form of ownership in which two or more partners are involved. Like the sole proprietorship, a partnership arrangement carries unlimited liability for the owners. Limited Partnership is a special form of partnership to limit liability for most of the partners. Under this arrangement, one or more partners are designated as general partners and have unlimited liability for the debts of the firm, while the other partners are designated as limited partners and are only liable for their ...

    Solution Summary

    The three forms of business organizations are given. The solution discusses the goal of a financial manager.