1-2. What are the three principal forms of business orgnanization? What are the advantages of each? Answer: The three main forms of business organization are: Proprietorship Which is an unincorporated business owned by one individul. Advantages: It is easily and inexpensively formed It is subject to view government regulations It is income is not subject to corporate taxation but is taxed only as a part of th eproprietor’s personal income. Disadvantages: It is difficult for proprietorship to obtain the capital need for growth The proprietor has unlimitide personal liability for the business debts The life of proprietorship is limited to the life of its founder Partnership Exist whenever two or more persons or entities associate to conduct a noncorporate business for profit. A partnership advantages and disanvantages are similiar to those of a proprietorship. Regarding liablity, the partners can potentially lose of all their personal assets, even assets not invested in the business, because under partnership law , each partner is liable for the business debts. In both regular and limited partnerships at least one partner is liable for the debts of the partnership. Corporation Is a legal entity created by state laws, and it is separate and distinc from its owners and managers. Advantages: ...