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There are many different types of business organization’s that should be taken into consideration when going into or continuing a business venture. The organizations described below have many different quality’s that one must think about. Following will be the characteristics of each for a more thorough understanding. The details of each should be closely followed as each has its own unique pro and con that could be vital to a business.
Sole Proprietorship
Sole proprietorships are those not incorporated and owned by a single person. They are also the most common. They are inexpensive and easy to operate. They are great for small businesses that do not require large capital needs. All profits and losses are figured into the owners personal taxes. These advantages however do not outweigh the disadvantages. The business owner is responsible for all business debts. Sole proprietors are also personally liable if they cannot pay suppliers or somebody gets hurt in the business. If something were to happen the sole proprietor could lose everything they have to pay the debt. These are easy startups in almost any state with just a business license. When the owner retires or decides to do something else the business is finished.
General Partnerships
These are unincorporated partnerships where two or more co-owners carry on business for profit. Each co-owner is considered a partner. This organization is risky especially if the group of owners is large and they do not know each other. Each partner is personally liable for the debt of the enterprise whether caused by themselves or the other partner or partners. They are also liable for any injury a partner or employee may sustain while on business. They are also liable for any contracts signed for on behalf of the business. Like a sole proprietorship they are easy to form and not