Asked by Denice Isidro on Jun 06, 2024
Verified
Discuss the advantages and disadvantages of sole proprietorships, partnerships and corporations.
Sole Proprietorships
A business structure where a single individual owns and operates the business, taking on the responsibilities and benefits of the business.
Partnerships
A business structure in which two or more individuals manage and operate a business in accordance with the terms and objectives set out in a Partnership Deed.
Corporations
Corporations are legal entities that are separate from their owners, allowing them to own assets, incur liabilities, and conduct business activities.
- Apprehend the traits, advantages, and limitations of distinct business establishments (sole proprietorship, partnership, corporation).
Verified Answer
RM
Riley MarshallJun 12, 2024
Final Answer :
A sole proprietorship is a business that has one owner. The advantage of a sole proprietorship is that the owner makes all of the decisions for the business. Another advantage is ease of formation. A disadvantage is that if the business cannot pay its obligations, the business owner must pay them from personal Assets. The business ends with the death of the owner or the closing of the business.
A partnership is a business owned by more than one person. Its advantage is ease of formation. The disadvantages are that partners could lose personal Assets to meet obligations of the partnership and a partnership ends with death of a partner from the partnership.
A corporation is a business owned by stockholders. The advantages are that stockholders have limited personal risk which is limited to their investment in the company. The corporation has unlimited life and the disadvantage is that a corporation is more difficult to form.
A partnership is a business owned by more than one person. Its advantage is ease of formation. The disadvantages are that partners could lose personal Assets to meet obligations of the partnership and a partnership ends with death of a partner from the partnership.
A corporation is a business owned by stockholders. The advantages are that stockholders have limited personal risk which is limited to their investment in the company. The corporation has unlimited life and the disadvantage is that a corporation is more difficult to form.
Learning Objectives
- Apprehend the traits, advantages, and limitations of distinct business establishments (sole proprietorship, partnership, corporation).