Competency 310.1.2: Organizational Forms
a. Sole proprietorship: This is the easiest and least expensive business form to set up. Advantages include low minimal legal fees to obtain proper licenses or permits, easier tax preparation with lower tax rates, and since it only has one owner that owner has complete control in the decision making for the business. Sole proprietorship does not go without its disadvantages. Disadvantages include the challenge to raise money for business growth, unlimited personal liability, and the heavy sole responsibility for the success or failure of the business.
• Liability: Sole proprietorships have only one owner and that owner bares unlimited liability since there is no distinction between the business and owner. In the event of the business being sued, the owner would be responsible for the debt or damages incurred by the outcome. If the owner possessed …show more content…
It can make it just with an issue of stocks. Another advantage is company’s ability to operate even if stakeholders leave the company. The main burden of corporation is “double taxation”, which takes substantial amount of profit from shareholders. The other disadvantage is complexity registration and its high costs.
e. S-corporation: Is a form of an enterprise that can offer similar advantages as those stated above. Some of those advantages include tax savings, business expense tax credits, and independent operations regardless of the shareholder status or participation. With those advantages, come some disadvantages. A couple of those disadvantages are stricter operational processes and shareholder compensation requirements.

• Liability: Like shareholders of C-corporation, shareholders of S-corporation also have the benefits of limited liability. If the corporation experiences a financial turmoil, the shareholders are only at risk of losing what they