Business Ownerships Essay, Research Paper
Will Rush
Intro. To Business
Summary
2-6-01
Sole proprietorships have numerous advantages and disadvantages. They are easy to start, needing only a license and a bank account. You are your own boss, and in turn make the rules. You also keep what you make and pay taxes at a lower rate than a corporation. There is also a large amount of privacy involved with a sole proprietorship. On the other hand, capital is harder to obtain for a sole owner of a business. Any legal disputes all fall on the owner also. It is harder for one person to run a business alone, because they have to do all of the work.
In a partnership, the business is easy to start, but a little harder than a sole proprietorship because of the contracts between the two owners. The owners are taxed personally, and all profits are split down the middle. An advantage over sole proprietorship is that partnerships have two or more people to give capital, time, and ideas. Also, partners can get new partners when the other retires or dies. One major disadvantage is that the partners are liable for each other. Many times there are disagreements between partners. Another problem is when there is a partner that makes the other partner do all of the work.
Corporations are the most complicated of all business types. They, by far, produce more money than most sole proprietorships and partnerships. They have much more of an opportunity to gain access to capital, people, and ideas. A corporation has very limited liability. Private shareholders have no liability at all. They also have liquidity, turning stock into cash, which is a very good quality. Corporations are not perfect though. There is a good bit of government involvement in a corporation. There is not much privacy at all. There is also a lot of pressure put on the people at the top to produce by the shareholders. Corporations also have to report on their business giving advantages to the competitors. Shareholders must also pay taxes on the their dividends. Meaning that corporate profits are taxed twice. Other types of businesses are taxed only once.
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