|
Type of Business |
Advantages |
Disadvantages |
| Sole Proprietorship |
- Low start-up costs
- Greatest freedom from regulation
- Direct control by owner
- Minimum working capital requirements
- Tax advantage to small owner
- All profits to owner
|
- Unlimited personal liability
- Lack of continuity
- More difficult to raise capital
|
| Partnership |
- Ease of formation
- Low start-up costs
- Additional sources of venture capital
- Broader management
- Limited outside regulation
|
- Unlimited personal liability
- Lack of continuity
- Divided authority
- Difficulty in raising additional capital
- Hard to find suitable partners
|
| Corporation |
- Limited liability
- Specialized management
- Ownership is transferable
- Continuous existence
- Legal entity
- Easier to raise capital
- Unity of action account having centralized authority in board of directors
|
- Closely regulated
- Most expensive to organize
- Charter restrictions
- Extensive record-keeping necessary
- Double taxation, except when organized as an "S” Corporation
- Difficult to liquidate investment
|