SOLE PROPRIETORSHIP

 Single person has business

 Raise capital from personal resources

Advantages

 Owner receive all profit in business

 Single taxation in the form
 Low organization cost
 Independent in decision making in business
 Secrecy in business
 Ease of dissolution

Disadvantage

 Unlimited liabilities in this form

 Limited fund raising power in this type
 Much hurdles in this type
 Difficult to give employee long run career opportunity
 Lack of continuity when proprietor dies

PARTNERSHIP

 2 or more than persons in partnership

 Larger than sole proprietorship
 Article of partnership (means contract between them)

Advantages

 Can raise more funds in this type

 Borrowing power enhanced in partnership
 More brainstorming, more skilled in partnership
 Single taxation in this form

Disadvantages

 Unlimited liabilities in this form

 Partnership resolve when any partner dies
 Difficult to liquidate and transfer in this form

CORPORATION

 Entity created by proper law and regulation

 It has legal power in tis form
  It can be sue and be sued in corporation
 Stockholders purchase its shares of the company

Advantages

 Owners have limited liability in this form

 Ownership is transferable
 Long life of firm
 Can hire professional experts
 Has better access to financing in corporation

Disadvantages

 Double taxation in corporation

 More expensive to organize and also difficult
 Subject to greater government regulation
 Lack of secrecy in corporation