SOLE PROPRIETORSHIP Description  Owned by one person  Most common form of business organization

SOLE PROPRIETORSHIP Advantages  Started easy  Easy management – make all decisions  No business income taxes(must pay personal income taxes on profits)  Don’t share profits – keep all  Psychological – “I’m the boss.”  Ease of getting out of business

SOLE PROPRIETORSHIP Disadvantages  Unlimited liability( may have to sell personal assets to pay business debt)  Difficulty in raising financial capital – limited access to funds  Size and efficiency  Limited managerial experience  Difficulty of attracting qualified employees  limited life (business ends if owner dies, goes bankrupt, unable to work, etc.)

PARTNERSHIP Description  Owned by two or more people  Least common form of business organization  two types: general (co-equal) and limited (not equal – general/silent)

PARTNERSHIP Advantages  Ease of establishment  Ease of management  Attract financial capital more easily  Slightly larger size makes efficiency easier  Easier to attract top talent  Can benefit from specialization  More access to start-up money than sole proprietorships

PARTNERSHIP Disadvantages  Each partner fully responsible for acts of other partners  Limited life (partner dies or leaves, partnership must be ended and reorganized under new owner’s name)  Potential conflict between partners  Division of profits  Unlimited Liability

CORPORATION Description  Owned by shareholders  Earns the greatest percentage of business profits in the U.S.

CORPORATION Advantages  Access to large amounts of funds for expansion  Can grow large and offer opportunity for advancement  Limited Liability  Unlimited Life

CORPORATION Disadvantages  Double Taxation (company is taxed on its profits and shareholders are taxed again on dividends they earn from company)  Can lose control of company  Greater government oversight and legal issues