Gutlay, Julie Ann Fe S.

BSA-3203

1. What are the advantages and disadvantages of changing the company organization from a
sole proprietorship to limited partnership?
 The advantages of changing sole proprietorship to limited partnership is that
limited partner can depart from the business without ending the limited
partnership. Stakeholders have limited liability this means that stakeholders
cannot loss their personal properties unlike in the sole proprietorship where
individual have unlimited liability. The disadvantage is that the decision-making
process will take no longer in limited liability company since in making every
decision unlike in a sole proprietorship that the owner has its own decisions
without consulting others.
2. What are the advantages and disadvantages of changing the company organization from a
sole proprietorship to a corporation?
 In changing the company organization from a sole proprietorship to a corporation
has the following advantage and disadvantages. First, the advantages may include
personal liability protection, business security and continuity and easier access to
capital. Moreover, it may have limited liability, credibility of large-scale business,
more long-term structure and better tax management perspective. Second is the
disadvantages, it takes higher cost and it included being time consuming, subject
to double taxation, as well as having rigid formalities and protocols to follow.
Corporation business is much better because it has limited liability that will
undertake to shareholders meaning there is less possibility of loss and debt
because there is an organization who is taking it and looking up for the operation
of business.
3. Ultimately, what action you recommend the company to undertake? Why?
 Personally, I would recommend that dee and Lyn would change to corporation
because their business is becoming leading worldwide. Therefore, they need
shareholders and board members to be liable to the income and investment of
their company in order to protect it from liability and loss. It will be more secure
and large-scall business. There’s a lot more opportunities and positive outcome on
choosing corporation. It may take risk but it is surreal worth it.