Question

Compare and contrast among sole proprietorship, general partnership, and corporation forms of business by listing and discussing TWO (2) advantages and TWO (2) disadvantages of each.

Answer 1

SOLE PROPRIETORSHIP	GENERAL PARTNERSHIP	CORPORATION
Advantages	Advantages	Advantages
1. The formation of this kind of business is very easy.	1. The business can have greater access to skills, knowledge, and other resources.	1. The business can have a large amount of capital.
2. The owner has autonomy in making decisions.	2. When there are more partners, the business can have more capital.	2. The liability of the members of the corporation is limited.
Disadvantages	Disadvantages	Disadvantages
1. The resources are less and the capital is also less.	1. Conflicts may arise among the partners and decision making can become difficult.	1. The formation of a corporation is a complex process.
2. The owner has unlimited liability.	2. A partner has unlimited liability even if the loss has occurred due to the actions of the other partner.	2. The decision making in a corporation can be a time-consuming process. The members may have conflicts with each other and they may not reach a common ground for decision making.