why do you think sole proprietorship and partnership typically incorporate (become corporations) when they experience rapid...

why do you think sole proprietorship and partnership typically incorporate (become corporations) when they experience rapid and sizable increases in their production, sales and profits?

Solutions

Expert Solution

Answer:-

A sole proprietorship is a business claimed and worked by one individual (proprietor). Partnership is claimed and worked by at least two proprietors or accomplices. A partnership is a legitimate element, properly incorporated with Articles of Association, with restricted risk, can deliver and sell products, can incur debts, can sue or be sued. The obligation of the investors is restricted to the estimation of the offers they hold. The financial risk of the company is restricted to the estimation of the benefits they hold.

- The reasons sole owners and partnership firms decide to incorporate is a result of :-

• Restricted risk of the corporations: The obligation of the investors is constrained to the estimation of the offers they hold. The financial risk of the enterprise is restricted to the estimation of the benefits they hold.

• Life of the element: Sole proprietorship and partnerships are subject to their proprietors – while the life of the corporations which can go on indefinitely.

• Transferability of offers: Shares can be handily moved by investors.

• Credit: Corporations can without much of a stretch raise capital in the financial exchange

• Income of the element: Income for the situation of sole proprietorship and partnership is isolated among the proprietor or proprietors, while, for the situation of incorporated corporations, the income streams into the business

Rahul Sunny answered 1 month ago

Next > < Previous

Related Solutions

Why do small business set up as sole proprietorship or partnership when filing for bankrupty ?...

Why do small business set up as sole proprietorship or partnership when filing for bankrupty ? How does it help them?

Your sole proprietorship or partnership is growing, and you plan to establish a corporation. Explain the...

Your sole proprietorship or partnership is growing, and you plan to establish a corporation. Explain the advantages, process for incorporation, and your options for corporate financing. PLEASE DO NOT COPY AND PASTE OTHER STUDENT WORK THAT WAS SUBMITTED BEFORE. MINIMUM 200 WORDS. THANK YOU

Forms of Business Organization Sole Proprietorship Partnership Corporation If you had the opportunity to start an...

Forms of Business Organization Sole Proprietorship Partnership Corporation If you had the opportunity to start an entirely new Business Organization, which of the three forms of Business Organizations listed above would you choose? Please discuss why you chose the form of Business Organization you selected, the "positives" and "negatives" associated with your choice, and reasons why you did not choose one of the other two forms of Business Organizations. Write 250 Words

Why do you think aggression is a "typically American problem"? What do you think Americans can...

Why do you think aggression is a "typically American problem"? What do you think Americans can do to reduce aggression in our children? How would you handle an aggressive student?

1 )Why are S corporations and partnerships called flow-through entities? 2) Briefly compare a sole proprietorship...

1 )Why are S corporations and partnerships called flow-through entities? 2) Briefly compare a sole proprietorship to a corporation as a business entity. 3) Name and describe two types of taxes other than the income tax. Give an example of each.

Why do you think that growing old is not the same experience for all categories of...

Why do you think that growing old is not the same experience for all categories of people? How does race, social class, and gender shape the aging process? (explain)!

1)Why do you think Mesopotamia is typically discussed first in a course such as this? (Western...

1)Why do you think Mesopotamia is typically discussed first in a course such as this? (Western Civilization) 2)What are some of the differences between Mesopotamia and Egypt. What are some of the similarities between the two? 3)Why do you suppose Mesopotamia was unable to sustain its civilzation and build itself into a power like Greece, Rome or Egypt? Each question should be as close to a third of the page as possible for a total of one page.

Why do you think females are typically the carriers of sex-linked traits, but those traits are not expressed?

For the Week 6 Critical Thinking Exercise, you will answer the following questions using your critical thinking and reasoning skills: Why do you think females are typically the carriers of sex-linked traits, but those traits are not expressed? Cystic fibrosis (CF) is an autosomal recessive disease. Jane and John do not have CF but are worried about having a child who will have it, because John had a brother with the disease. While meeting with a genetic counselor it was...

Research and identify five stereotypes that foreigners typically hold about Americans. Why do you think they...

Research and identify five stereotypes that foreigners typically hold about Americans. Why do you think they might hold these stereotypes?

Why do you think most businesses are formed as sole proprietorships? Can any type of business...

Why do you think most businesses are formed as sole proprietorships? Can any type of business get this deduction if over the threshhold? Is there a phaseout component where other factors would come into play?

Subjects