Sole proprietorship
a. As ownership:
A sole proprietorship is a business
and operated by a single individual.
The owner has full control and
responsibility for the business’s
operation, profits and liabilities
b. How investors earn a profit;
In this sole proprietorship the sole
owner will reaps all the profits that is
generated by the business. Any
income the business generates
directly benefits the owner. They can
use these profits for personal
expenses, savings or reinvesting in
the business.
C. Liability whether limited versus unlimited
With this the owner has unlimited personal
liability for the business debts and
obligations. This means that if the business
incurs such as: savings, property etc. are at
risk. The owner is personally responsible for
settling a business-related liability.
d. When the sole proprietorship dies
the business is typically considered
and extension of their personal
estate. The business may cease to
operate or be sold or transferred to
heirs or the beneficiaries mentioned
in the will
e. Advantages and disadvantages as
formation
General Partnership
It is a general partnership involves in two or As corporation it is a legal entity separate
more individuals who share ownership and
management responsibilities. Partners
contribute resources and share profits and
losses.
In this partnership the profits are shared
among the partners according to the terms
outlined in the partnership agreement.
Usually, partners distribute profits based on
their ownership percentage. The profits can
be taken as income, reinvested in the
business or a combination of both.
In a general partnership all partners share
unlimited joint and several liability, this
means that each partner is not only
responsible for their own actions and
liabilities of the other partners.
In this general partnership if partners die the
partnership is usually dissolved unless the
partnership agreement specifies. The
surviving partners may decide to continue the
business with the consent of deceased
partnership estate. Alternatively, the
partnership might be liquidated and the
assets distributed among the partners or the
heirs of the deceased.
Advantages:
Shared responsibility
Corporation
from its owners that is known as
shareholders. the ownership is divided into
shares of stock and elect a board of director
to oversee the company’s management.
In a corporation the profits are earned by the
company and then distributed to
shareholders in the form of dividend. So the
shareholders are receive dividends based on
the number of shares they own/
In a corporation shareholder have limited
liability meaning that their personal assets
are generally protected from the corporation
debts and legal obligations.
In this a corporation is a separate legal entity
from its owner. when the shareholder dies,
the corporation doesn’t cease to exist. The
ownership shares can be passed on the heirs
or beneficiaries according to their will. Its
continues operations under the management
of the remaining shareholders and the board
of directors.
Advantages:
Capital formation
 Tax benefits perpectual existence.
Advantages: easy formation Disadvantages: Disadvantages:
Direct decision making and tax Conflict potential Capital formation and limited liabilities
simplicity Limited life
Disadvantages: Disadvantages:
Unlimited liability Double taxation and Bureaucracy
Limited resources
Limited expertise
f. Advantages and disadvantages as to Advantages: Advantages:
raising a capital Share resources. Diverse skillset Flexibility Access to capital markets
Advantages: Shared decision meeting, conflict potential Disadvantages:
Control, flexibility, direct profits Complexity. Dilution and disclosure
Disadvantages:
Limited capital sources. Risk and
Perception

Hinampas / Assignment 1