There are mainly four forms of business organization:
- Sole proprietorships
- Partnerships
- Corporations
- Limited liability corporations(LLC) and partnerships.
Advantages:
- For the first two, advantages include the ease and low cost of formation.
- The advantage of corporations include limited liability, indefinite life, ease of ownership transfer, and access to capital markets.
- Limited liability companies and partnerships have limited liability like corporations.
Disadvantages:
- Sole Proprietorship's cons:
- Difficulty in obtaining large sums of capital
- Unlimited personal liability for business debts
- Limited life.
- Unlimited liability
- Limited life
- Difficulty of transferring ownership
- Difficulty of raising large amounts of capital.
- Double taxation of earnings.
- Setting up a corporation and filing required state and federal reports, which are complex and time‐consuming.
- Cons of Limited liability corporations and partnerships:
- Difficulty in raising capital and the complexity of setting them up.
No comments:
Post a Comment