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FORMS OF BUSINESS ORGANIZATIONS - Coggle Diagram
FORMS OF BUSINESS ORGANIZATIONS
Sole proprietorship
Advantages
owner can keep profits of successful management
the proprietorship does not have to pay separate business income taxes
management also is relatively simple
psychological satisfaction
easy to start
easy to get out of business
Disadvantages
proprietor often has limited managerial experience
difficulty of attracting qualified employees
the size and efficiency of a proprietorship
difficulty of raising financial capital
owner of the business has unlimited liability
limited life
Partnership
Advantages
lack of special taxes
attract financial capital more easily
ease of management
more efficient operations
ease of startup
easier to attract top talent
Disadvantages
partner is fully responsible
limited life
conflict between partners
Corporation
Advantages
directors of the corporation can hire professional managers
ease of transferring ownership of the corporation
limited liability for its owners
ease of raising financial capital
Disadvantages
difficulty and expense of getting a charter
the owners, or shareholders, have little voice in how the business is run
double taxation of corporate profits
more government regulation