Umali, Jenny Shane P.

BSA3 – (irreg)

Financial Management Activity 2:

1. The advantages and disadvantages of changing the company organization from a sole
proprietorship to a limited partnership is that there is a limited liability for owners when it
comes to business debts and financial obligations, separation of business and personal assets,
the ability to be owned by just one or more than one person, and the ability to issue stock and
form a board of directors.

2. Advantages of changing from a sole proprietorship to corporation are the benefits that
come from creating a separate legal entity for your business. While most businesses start out as
sole proprietorships, many individuals find a corporate structure is more appropriate as the
enterprise grows.

3. I would recommend the company to change to a limited partnership. This is because there
are expectation of growing the business in substantial entity with outside capital. There are also
expectations of transferring intangible asset like contracts. There are also anticipated liabilities
and a limited partnership would be suitable in avoiding personal liability of shareholders.