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The three most common forms of business organization are the sole
proprietorship, the partnership, and the corporation. Business laws and
the usage of company titles in some countries may vary from the definition
and description of each form of business organization given below.
1. Sole Proprietorship
1.1. Advantages
1.2.Disadvantages
The liability of sole proprietor is unlimited. The owner is personally liable for all
the debts of the business to the full extent of the owner's property. Illness of
the owner may interrupt the business and the owner's demise may terminate
it. It can be difficult to raise capital.
2. Partnership
In a limited partnership, at least one partner, but not all partners, assumes
limited liability---liability only to the extent of the capital the partner has
contributed to the partnership. The company name may end with the words
"Co. Ltd.", "Company Limited", "Ltd.", "Limited", or their equivalent in other
languages.
In Europe and some other areas, the words "Limited Company", "Limited
Partnership", or their equivalent in other languages may signify a corporation.
2.1. Advantages
Partnership is easy to form. Start-up costs are low. The partners provide
additional sources of venture capital. The management base is broader. It is
free from outside interference, except for government regulations. Possible tax
advantage.
2.2. Disadvantages
3.1. Advantages
3.2 Disadvantages