Forms of business organisations

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  • Forms of business orgs
    • Sole proprietorship: owned by one person;
      • Least regulated; owner can keep all the profits; taxed once as personal income
      • unlimited liability; amount of equity that can be raised in limited; difficult to transfer ownership; business dies with owner
    • Partnership: formed by 2 or more people or firms
      • all partners share losses; easy and inexpensive to form;
      • unlimited liability; limited life of business; ownership transfer is difficult; inability to raise equity
    • Corporation: business created as a distinct legal entity- has the rights, duties and privileges of an actual person
      • complicated to start; separation of ownership & mgmt; double taxation
      • ownership can be easily transferred; unlimited life of firm; limited liability; easier to raise capital
  • Sole proprietorship: owned by one person;
    • Least regulated; owner can keep all the profits; taxed once as personal income
    • unlimited liability; amount of equity that can be raised in limited; difficult to transfer ownership; business dies with owner

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