The three traditional business organizations are Sole Proprietorship, Partnership, and Corporation. I will compare and contrasts the advantages and disadvantages of each organization and explain the four hybrids forms, Limited Partnership, S Corporation, Limited Liability Company, and Limited Liability Partnership.
Sole Proprietorship consist of one person doing business and are the most numerous forms of business organization in the U.S.A., however they account for little in the way of aggregate business receipts (Types of Busniess Organization, 2013).
Advantages
* Ease of formation and dissolution.
* Low startup cost and low operational overhead
* Ownership of all profits
* Subject to fewer regulations
* No corporate income taxes
Disadvantages
* Unlimited Liability
* Limited Life (if the owner dies the business dies as well)
* It could be difficult to raise capital
A Partnership consists of two or more individuals in business together. Partnerships can be as small as a neighborhood grocery store or as big as legal or accounting firms and May also have numerous partners involved (Types of Busniess Organization, 2013).
Advantages
* Synergy
* Partnerships are relativity easy to form
* Subject to fewer regulations than corporations
* Stronger potential of access to greater amounts of capital
* No corporate income taxes
Disadvantages
* Unlimited liability
* Limited life (partnership may end due to death or withdrawal of a partner)
* Disputes or conflicts between partners which could lead to dissolving the partnership. A partnership agreement would need to be put into place.
Corporations are probably the most dominant form of business organizations in the U.S.A. Corporations are fewer in number but they account for the majority share of aggregate business receipts in the U.S. economy. A corporation is a legal entity doing...