Which of the following legal forms of business, (sole proprietorship, partnership, corporation), would be favored and why? Be sure to provide a short explanation. Example: (a) “Organizational requirements and costsis an advantage of the sole proprietorship. The business is formed simply by beginning to do business. Partnerships and corporations require a more formal organizational process since a number of owners are involved.” A. Organizational requirements and costs (done for you above)B. Liability of the ownersC. The continuity of the businessD. The transferability of ownership E. Management control & regulationsF. The ability to raise capitalG. Income taxes.

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Answered: Which of the following legal forms of…

Foundations of Business - Standalone book (MindTap Course List)

4th Edition

ISBN:9781285193946

Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor

Publisher:William M. Pride, Robert J. Hughes, Jack R. Kapoor

Chapter4: Choosing A Form Of Business Ownership

Section: Chapter Questions

Problem 3DQ

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Which of the following legal forms of business, (sole proprietorship, partnership, corporation), would be favored and why? Be sure to provide a short explanation. Example: (a) “Organizational requirements and costsis an advantage of the sole proprietorship. The business is formed simply by beginning to do business. Partnerships and corporations require a more formal organizational process since a number of owners are involved.”

A. Organizational requirements and costs (done for you above)

B. Liability of the owners

C. The continuity of the business

D. The transferability of ownership

E. Management control & regulations

F. The ability to raise capital

G. Income taxes.

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

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