Comparative Analysis of Differenet Forms of Business
AHSAN JAVED
11P0023
MBA 1(A)
Assignment 1
Corporate Finance
Submitted to:
Sir kumail Rizvi
Comparative analysis of different forms of business organization
Ownership
A sole proprietorship has only a single owner.
A partnership has two or more owners.
A corporation can have an unlimited number of owners.
Liability
In Sole proprietorship the liability is unlimited; owners are responsible for whatever profit the business gets and whatever loss the business incurs.
In partnerships the profits and liability are distributed between the two or more owners according to their shares.
In Corporations there is limited liability, and in case of failure shareholders may lose their investment but he/she will not be liable to any debts of the corporations.
Life of the business
The life of the business in sole proprietorship depends on the life of the owner.
In partnerships, it ends with death, bankruptcy of partner.
In corporations, a corporation does not expire upon the death of its shareholders, directors or officers.
Excess to Capital
In Sole proprietorship the excess to capital is very limited.
In partnerships the excess to capital is more then sole proprietorship but much less then corporations.
Corporations have excess to great amount of capital.
Management
In sole proprietorship, single owner does all the management of the business.
In partnerships, owner’s agreement on management is required.
In corporations, board of directors appoints the management team.
Ease of setting up
Sole proprietorship is quite easy to setup and there are usually no legal agreements required.
Partnerships are also easy to setup but there are legal agreements between the owners and usually some paperwork required.
Corporations are more difficult and costly to set up, often requiring state applications, legal paperwork such as articles of incorporation, board resolution and affidavit.
Tax Structure
In Sole proprietorship, the business and the
11P0023
MBA 1(A)
Assignment 1
Corporate Finance
Submitted to:
Sir kumail Rizvi
Comparative analysis of different forms of business organization
Ownership
A sole proprietorship has only a single owner.
A partnership has two or more owners.
A corporation can have an unlimited number of owners.
Liability
In Sole proprietorship the liability is unlimited; owners are responsible for whatever profit the business gets and whatever loss the business incurs.
In partnerships the profits and liability are distributed between the two or more owners according to their shares.
In Corporations there is limited liability, and in case of failure shareholders may lose their investment but he/she will not be liable to any debts of the corporations.
Life of the business
The life of the business in sole proprietorship depends on the life of the owner.
In partnerships, it ends with death, bankruptcy of partner.
In corporations, a corporation does not expire upon the death of its shareholders, directors or officers.
Excess to Capital
In Sole proprietorship the excess to capital is very limited.
In partnerships the excess to capital is more then sole proprietorship but much less then corporations.
Corporations have excess to great amount of capital.
Management
In sole proprietorship, single owner does all the management of the business.
In partnerships, owner’s agreement on management is required.
In corporations, board of directors appoints the management team.
Ease of setting up
Sole proprietorship is quite easy to setup and there are usually no legal agreements required.
Partnerships are also easy to setup but there are legal agreements between the owners and usually some paperwork required.
Corporations are more difficult and costly to set up, often requiring state applications, legal paperwork such as articles of incorporation, board resolution and affidavit.
Tax Structure
In Sole proprietorship, the business and the