Which Form of Ownership Is for You

Topics: Business law, Corporation, Types of companies Pages: 2 (511 words) Published: November 10, 2008
You may participate in the business world in a variety of ways. You can start your own business as a sole proprietor, in a partnership, or you can start or a buy corporation. There are advantages and disadvantages to each. However, there are risks no matter which form you choose. Before you decide which form is for you, you need to evaluate all the alternatives carefully. The most basic form of ownership is the sole proprietorship, a business own and managed by one person. This kind of business is easier of starting and ending, you also get to be your own boss; you get to retain all company profit and to have full control of your business. There are also disadvantages on a sole proprietorships business, such as unlimited liability-the risk of personal losses, limited financial resources, management difficulties, and overwhelming time commitment. The second kind of ownership is partnerships, a legal form of business with two or more owners. There are four majors advantages in this type of business, such as more financial resources, shared management skills and knowledge, longer survival and no special taxes. But there are also four majors disadvantages such as unlimited liability, division of profits, disagreements among partners and difficulty of termination. Now there are more than three types of business ownership but the last kind of business ownership that I’m going to be discussing about is corporations, a legal entity with authority to act which has liability separate from its owners. been in a corporation it offer the owners limited liability and that is the most significant advantages of a corporation; more money for investment, size, perpetual life, ease of ownership change, ease of drawing talented employees and separation of ownership from management. There are also some disadvantages, such as extensive paperwork, double taxation, two tax returns, difficulty of termination, and initial cost. All the major forms of...
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