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Forms Of Business Ownership Essay

929 words - 4 pages

Sherry Munden
BUS 280 YD2

Forms of Business Ownership

Sole Proprietorship
Pros:
The easiest way to start a business, you decide what you want your business to be, buy whatever equipment is needed along with leasing a building and getting permits. If the time were to come that you no longer to be in business, you just simply stop because there is no one else that has a stake in the business.
You get to keep the profit that the business earns and if the business does well the profit can increase to your benefit.
All the taxes on a sole proprietorship are taxed as personal income of the owner.
You have the advantage of being you own boss.
Being a business owner is something to be ...view middle of the document...

Master Limited Partnership: This type of partnership is like a corp and can trade on the stock exchange, but it is taxed like a partnership and avoids costly corporation tax.
Limited Liability Partnership: Limits the risk of losing the personal assets as the owners of the business. This type of partnership limits losing personal assets due to their own negligence and not that of the partners negligence.
Pros:
The more people involved in your business will provide a wider span of financial opportunists.
Taxed as the personal income of the owners
The more people will bring more skills into the business
Longer survival rates
Cons:
Each of the owners have unlimited liability for the debts of the business.
Sometimes disagreements may arise over different situation that occur within the business
It is not as easy to close down a business if more than one owner is involved. Decisions will have to made as to the capital of the business and how it will be handled.
The profits have to be divided between partners.

Corporation
Pros:
A corporation has an advantage in the ability to raise money. It can sell shares of stock to the public. It is also easy to borrow money form investors by issuing bonds.
A corporation has limited liability and are only responsible for the amount that they invested.
A corporation also has advantage because of size; they can raise money easier, hire people that have specialization in a certain field and can often have the most modern equipment.
Since a corporation is separate form those who own them, if a death occurs within the...

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