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OPTIONS FOR ORGANIZING BUSINESS Chapter 03 (Sole proprietorships…
OPTIONS FOR ORGANIZING BUSINESS
Chapter 03
Sole proprietorships
Advantages
Profits
Flexibility and control
Secrecy
Government regulation
Ease and cost of formation
Taxation
Quick decisions
Closing the business
Disadvantages
Limited skills
Lack of continuity
Limited sources of funds
Lack of qualified employees
Unlimited liability
Taxation (incorporates the business)
Partnership
Advantages
Combined knowledge and skills
Decision making
Availability of capital and credit
Regulatory controls
Ease to organization
Disadvantages
Unlimited liability
Business responsibility
Partnerships may be subject to disagreements
Life of partnership
Limited partners have no voice
Distribution of profits
Limited sources of funds
Corporations
Disadvantages
Employee-owner separation
Disclosure of information
Forming a corporation
Double taxasion
Advantages
Ease to transfer of ownership
Limited liability
Perpetual life
External souces of funds
Expansion potential