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  • Business Ownership Types and Advantages-Disadvantages

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    Atul Gokhale
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    This document compares the advantages and disadvantages of different types of business ownership, including sole proprietorships, partnerships, corporations, and franchises. Sole proprietorships have low start-up costs but unlimited liability, while partnerships are easy to form but also have unlimited liability. Corporations provide limited liability but are more expensive to organize and require extensive record keeping. Franchises offer management assistance but come with possible high fees and less independence.

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    This document compares the advantages and disadvantages of different types of business ownership, including sole proprietorships, partnerships, corporations, and franchises. Sole proprietorships have low start-up costs but unlimited liability, while partnerships are easy to form but also have unlimited liability. Corporations provide limited liability but are more expensive to organize and require extensive record keeping. Franchises offer management assistance but come with possible high fees and less independence.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    8 views1 page

    Business Ownership Types and Advantages-Disadvantages

    Uploaded by

    Atul Gokhale
    This document compares the advantages and disadvantages of different types of business ownership, including sole proprietorships, partnerships, corporations, and franchises. Sole proprietorships have low start-up costs but unlimited liability, while partnerships are easy to form but also have unlimited liability. Corporations provide limited liability but are more expensive to organize and require extensive record keeping. Franchises offer management assistance but come with possible high fees and less independence.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    Advantages and Disadvantages of

    Types of Ownership

    Forms of
    Advantages Disadvantages
    Ownership

    Sole proprietorship 1. Low start-up costs 1. Unlimited liability

    2. Greatest freedom 2. Lack of continuity

    3. All profits to owner 3. Difficulty in raising capital

    4. Owner in direct control

    Partnership 1. Easy to form 1. Unlimited liability

    2. Low start-up costs 2. Lack of continuity

    3. Divided authority 3. Divided authority

    4. Difficulty finding suitable partner

    Corporation 1. Limited liability 1. Close regulation

    2. Specialized management 2. Most expensive to organize

    3. Ease of raising capital 3. Extensive record keeping

    Franchise 1. Smaller than usual capital investment 1. Possible high franchiser fee

    2. Prior public acceptance of product 2. Some loss of independence

    3. Better-than-average profit margins 3. Possible difficulties canceling contract

    4. Management assistance

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