Sole proprietorship:
Advantages:
– Easy and inexpensive to set up.
– Owner has complete control over the business and decision making.
– Owner keeps all profits.
– Easy to dissolve or sell the business.
Disadvantages:
– Owner has unlimited personal liability for the business’s debts and legal issues.
– Difficult to obtain financing.
– Personal financial and legal issues can affect the business.
– Limited ability to hire employees or delegate tasks.
Partnership:
Advantages:
– Easy and inexpensive to set up.
– Owners can bring different skills and resources to the business.
– Cost and workload can be shared.
– Easy to dissolve or sell the business.
Disadvantages:
– Owners have unlimited personal liability for the business’s debts and legal issues.
– Disagreements among partners can occur, leading to conflicts and potential dissolution of the business.
– Difficult to obtain financing.
– Limited ability to hire employees or delegate tasks.
Corporation:
Advantages:
– Limited liability for shareholders.
– Easier to obtain financing.
– Can easily transfer ownership or sell the business.
– Can hire employees and delegate tasks to management.
Disadvantages:
– More expensive and complicated to set up.
– More regulations and formalities to comply with.
– Owners may have less control over the business.
– Profits are subject to double taxation.
