Question

List different types of business organizations and discuss the pros and cons associated with each organizational form.

Answer 1

Three forms of business organizations are:

- Sole proprietorship

- partnership firm

- Corporation

Sole proprietorship:

pros - Easy to form and operate

        - simple structure

Cons - Unlimited liability

     - Limited access to capital

Partnership:

Pros - easy to establish and desolve

     - simple taxation

Cons - Unlimited liability

      - shared profits

Corporation:

Pros - limited libaility

      - unlimited access to capital

Cons- Double taxation

     - difficult to handle and manage, many compliances

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