In: Finance
CREATE A CHART comparing the advantages and disadvantages of the following types of businesses: sole-proprietorship, general partnership, corporation, limited liability company (LLC).
Sole -proprietorship
The sole proprietorship is a common business structure .In this type of business the owners are responsible for business debt. There are some advantages in this type of business.It is easy to start the business and the proprietor is the owner. Income from business is taxed as personal income. The owner has complete control of business and makes all decisions .In this type of business assets are easy to liquidate upon the death of the owner .There are some disadvantages . The amount of investment capital can raise is limited and liability is unlimited .The life of business is dependent on the owners.
Genneral partnership
A business owned by two or more peoples who agrees to share in its profit is considered as partnership .General partnership are the simplest of all partnership An oral partnership will be a general partnership .Partnership business has some advantages and disadvantages .It is easy to get started and more investment capital is available. lf the partnership agreement permits a partnership could continue to exist if one of the partners dies. Partners are exposed tounlimited liability is one of the disadvantage of partnership .In partnership business owners cannot raise capital by selling an interest in the business and the life of the business is limited .
Corportion
A corporation is judicial entity It must becreated by at least two natural persons .They are technically called incorporators. In corporation stock holders have limited liability . Corporations have unlimited life and ownership is easily transferable .The owners donot have personal liability for debts of the same corporation.corporations must pay capital stock tax and are taxed twice is one of the disadvantage. Corporations are closely regulated by government agencies and its formation is expeenssiive..
Limited liability company
Likea corporations limited liability company is a separate legal entity. One of the main advantage of LLC iss that owners have limited liability ,No restrictions on the number of members allowed , pass-through taxation ,does not require annual paper work and owners are not personally responsible for business debts and liabilities are anthor advantages of LLC.Its formation is more expensive than sole-proprietorship and general partnership is one of the disadvantages of LLC.Ownership is typically harder to transfer than with corporation and limited life are another disadvantages of LLC.
A proprietorship is where a single owner operates the business .A partnership is smilar however it is owned by two or more individuals. A corporation is legal entity separate from the owner of the business . LLC are the best business structure for the majority of entrepreneurs .The owner of LLC are called members .LLC is a business structure designed to protect personal asssets from the liabilities of business .