The Three Basic Forms Of Business Organizations Essay
Single Proprietorship- Are entities that are owned and operated by the same individuals and is unincorporated. There are no specific laws or regulations that govern the creation and operation of this business. The advantage of this is the ability to start up is easy and requires minimal capital. A disadvantage to the owner is responsible for all the debts incurred by the business, which could hurt if one were to be litigated in any way.
Partnership- A partnership is an unincorporated business owned by two or more individuals. The agreement to engage into a partnership is usually written or verbal. Terms of the partnership are often detailed in the written agreement including work load, profit sharing and investments.
The advantage to a partnership is the split of duties for the business and minimizing initial startup costs, disadvantages is the like sole proprietorship is each partner is liable for debts of the business.
Corporation- Is a business entity separate from the individual owners. Corporations are owned by shareholders or stockholders that have a vested interest in the business. Shareholders buy shares of a company which equate to ownership of a company. Corporations are usually formed by larger groups and must meet certain legal requirements. The advantage to a corporation is should a company fail the owners only…