¶ … Business Ownership
For an entrepreneur, deciding on what form of ownership a business undertaking should take may end up being a rather tough decision to make. This is essentially because each form of business has its own advantages and downsides. In this text, I will discuss four main forms of business including limited liability companies, corporations, partnerships and partnerships.
Sole Proprietorship
In Madura's (2006) own words, this is "a business owned by a single owner." In this case, the single owner of such an entity is entitled to all the profits the entity generates. However, such an individual is also responsible for all the obligations the entity might accrue. One of the main advantages of a sole proprietorship is that in this case, the single owner does not share the profits generated by the business with any other individual (Madura, 2006). Further, this form of business is easy to start as there are few legal bottlenecks associated with its formation. However, in this case, the owner of the business assumes an unlimited liability and hence should the business be unable to...
Further, attracting capital in this case is a challenge.
Partnerships
On the other hand, a partnership as a form of business is established when two or more people come together and initiate an activity of an economic nature in which case all the profits and losses generated in such an undertaking are shared equally. A partnership may be preferred over any other business formation because just like a sole proprietorship, it is easy to form and manage. Further, based on the fact that its ownership comprises of two or more individuals, it is considered easier to raise capital in the case of a partnership (Madura, 2006). However, on the other hand, this form of business is prone to slow decision-making as all partners have to agree on a certain decision before the implementation or adoption of the same Kicks off. Further, unlike sole proprietorships, partners still have to share the profits generated equally.
Corporations
According to Miller & Hollowell (2010), a corporation can be defined…
