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Legal Form of Bussiness

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LEGAL FORM OF BUSSINESS

In this paper we will compare and discuss different forms of business and their advantages and disadvantages. Following are the different type of business formed to conduct work:
1. Sole proprietorship.
2. Partnership.
3. Limited liability partnership.
4. Limited liability company.
5. S corporation.
6. Franchise.
7. Corporate.
1. Sole proprietorship,
The sole proprietorship is a type of business entity that is owned and run by one individual. All the decisions of the business are made by that individual and there is no legal distinction between that individual and the business.
Following are the advantages and disadvantages of Sole proprietorship
Advantages
They have the ability to raise capital either publicly or privately.
To limit the personal liability of the officers and managers.
Limit risk to investors.
Sole proprietorships have the least government rules and regulations affecting it.
Owners have complete control over all the aspects of his or her business.
The owner can take any managerial decisions that he/ she wants to take.
Disadvantages
Raising capital for a proprietorship is more difficult because an unrelated investor has less peace of mind concerning the use and security of his or her investment .
The investment is more difficult to formalize other types of business entities have more documentation.
The enterprise may be crippled or terminated if the owner becomes ill.
The business is the same legal entity as the proprietor; it ceases to exist upon the proprietor's death.
The enterprise rests exclusively on one person, it often has difficulty raising long-term capital.
2. Limited liability partnership (LLP)
Following are the advantages and disadvantages of LLP: In an LLP, one partner is not responsible or liable for another partner's misconduct or negligence. This is an important difference

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