Nicole Putman
Unit 1 Discussion Board
The World of Finance
FIN410-0704B-01: Financial Management
November 15, 2007
The three most common legal forms of business organization include sole proprietorship, partnership and corporation. Each has their own advantages and disadvantages.
Sole Proprietorships:
It is a business that is operated and owned by one person for their own profit. Sole proprietorships are making up about 75 percent of all business firms. Has to raise the capital or borrow the money to get the business started. The owner has to be responsible for all the decisions that are made for the business. There is unlimited liability.
There are many advantages to sole proprietorships. The owner is able to have complete control and decision making power over the business, there is no going to someone else to get them to understand or agree to your ideas for the company. Any sales or transfers are taking place at the discretion of the proprietor. The owner of a sole proprietorship does not have to pay any corporate tax payments. There is a minimal legal cost to forming a sole proprietorship. There are just a few formal business requirements that are made upon the proprietor. The owner receives any profits and has to sustain all the losses of the business. It is made easier to dissolution of a sole proprietorship. There is another plus to be the only owner of the business; the owner is able to have independence and secrecy.
There are also many disadvantages to sole proprietorships. The proprietor will be personally held liable for debts and obligation that the business has acquired. It is harder to get investor to invest in the busi ...