First you needs to understand the given terms,
A sole proprietor is the person who is
completely a single owner for the profit they earn in the business
(revenue collected less cost) and bear the whole loss if there is
any.
Advantages :
- Applying for this firm is easy as it requires less time spend,
less paperwork and less money invested while registering for a
firm.
- They can employ as many employees and grow their business and
the tax benefits from hiring as many people increases as they hire
more.
- They are their own boss and not dependent on anyone else while
taking the huge decision for their business.
Disadvantages:
- The owner is fully liable to pay for the losses. If one firm
starts operating at less, it becomes really difficult to cover the
losses and expand for one person.
- Business ends when the sole proprietor is no more as it is the
sole owner. If owner dies, business dies with them.
- Initial funding is really difficult for one person and taking
loans are also not easy.
Partnership is a group of people coming
together for who set up the firms and manages the whole business.
Profit and losses are to be shared among them according to the
money they invested in it.
Advantages :
- Two or more is always is better than one while they share their
thought process which may helps in reducing risk.
- more funding is available as they are many heads to
invest.
- there is a process for splitting up if you wants to.
Disadvantages
:
- if partners join or leave, you will probably have to value all
the partnership assets and this can be costly.
- there is a risk of mismanagement or not meeting the consent
when there are more partners.
Corporation is usually a group of people
entitles to works as a single entity.
Advantages :
- The shareholders of a corporation are only liable up to the
amount of their investments.
- Public corporation can raise money by selling their bonds.
- The ownership perpetual life is full as the ownership passes to
the generation of investors.
Disadvantages
:
- Depending on the type of corporation, it may pay taxes on its
income, after which shareholders pay taxes on any dividends
received, so income can be taxed twice.
- If there are investors with no single goal, management will
work blindly.
I would work as a sole proprietor as i wants to work as an
single entity and works as an independent businessman. I do not
wants to be dependent on someone else to approve the same thing
which you thinks is right for the firm.