Advantages & Disadvantages of Business Organizations

What is Sole Proprietorship

• form of business organization recognized by law as a separate legal entity with all the rights and responsibilities of an individual, including the right to buy and sell property, enter into legal contracts, and to sue and be sued

• unincorporated business owned and operated by two or more people who share the profits and have unlimited liability for the debts and obligations of the firm

• unincorporated business owned and run by a single person who has rights to all profits and unlimited liability for all debts of the firm; - most common form of business organization in the U. S.

What is Partnership?

• form of business organization recognized by law as a separate legal entity with all the rights and responsibilities of an individual, including the right to buy and sell property, enter into legal contracts, and to sue and be sued

• unincorporated business owned and operated by two or more people who share the profits and have unlimited liability for the debts and obligations of the firm

• unincorporated business owned and run by a single person who has rights to all profits and unlimited liability for all debts of the firm; - most common form of business organization in the U. S.

What is Corporations?

• form of business organization recognized by law as a separate legal entity with all the rights and responsibilities of an individual, including the right to buy and sell property, enter into legal contracts, and to sue and be sued

• unincorporated business owned and operated by two or more people who share the profits and have unlimited liability for the debts and obligations of the firm

• unincorporated business owned and run by a single person who has rights to all profits and unlimited liability for all debts of the firm; - most common form of business organization in the U. S.

What is an advantage in Sole Proprietorship?

• Can attract more financial capital

• Easy to manage

• Unlimited life

• No additional business taxes on income

What is an advantage in Sole Proprietorship?

• Easy to start

• Can Issue stocks

• Can attract more financial capital

• Buy and sell property

What is an advantage in Sole Proprietorship?

• Unlimited liability

• Great management experience

• Can attract more financial capital

• Owner keeps all profits

What is a disadvantage in Sole Proprietorship?

• Difficult to raise capital

• Expensive to form

• profit taxed twice

• Conflict

(disadvantage) If the owner dies being in Sole Proprietorship, then

• Every employee is released from that company

• the company dies as well

• everything in the company is sold off

• All of the above

(disadvantage) What happens if an employee loses his finger in a sole proprietorship?

• the employee gets terminated for not being able to work no more

• unlimited liability kicks in

• The owner gets kicked out of his/her company and the employee gets to be the owner

• Owner's personal possession are at risk in the court.

(Advantage) What happens to company when partnership kicks in?

• Owner still keeps all profit

• larger size

• they can finally issue stocks bonds

• unlimited liability