Compare and contrast the corporate form of organization with sole proprietorships and partnerships. (must be typed...

Compare and contrast the corporate form of organization with sole proprietorships and partnerships. (must be typed out, not in a Chart).

Expert Solution

SOLE PROPRIETORSHIP	CORPORATE ORGANIZATION
Easiest to form	Difficult to form. Numerous legal and procedural formalities involved
Very limited, finances	Possible to arrange huge finances
Unlimited liability	Limited liability
Least stable	Most stable. Company enjoys perpetual succession
Not much managerial efficiency; because of one man’s limited abilities and capacity to manage	Management very efficient; because of professionally qualified and expert directors and managerial staff
Practically very less government regulation and control	Strict governmental regulation and control through numerous provisions of the Companies Acts
Maximum flexibility possible	Flexibility not possible due to legal and procedural problems
No sharing of profits	Sharing of profits, by way of distribution of dividends
Maximum personal attention to customers is possible	Because of large size and divorce between ownership and management; personal attention to customers is not possible

PARTNERSHIP	CORPORATE ORGANIZATION
Easy to form; need to have a partnership agreement	Difficult to form. Numerous legal and procedural formalities involved
Finances limited; but not very limited	Possible to arrange huge finances
Unlimited liability	Limited liability
Somewhat stable; but differences among partners may lead to dissolution of partnership	Most stable. Company enjoys perpetual succession
Management quite efficient; because of collective wisdom of partners, in decision-making	Management very efficient; because of professionally qualified and expert directors and managerial staff
Partnership Act applies; only when the Partnership Deed is silent on any point	Strict governmental regulation and control through numerous provisions of the Companies Act.
Flexibility possible due to joint decisions of partners	Flexibility not possible due to legal and procedural problems
Sharing of profits among partners	Sharing of profits, by way of distribution of dividends
Partners may also pay personal attention to customers	Because of large size and divorce between ownership and management; personal attention to customers is not possible

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