Business Essentials, 12/e

Noncorporate Business Ownership

1. Objective 3-5 Explain sole proprietorships, partnerships, and cooperatives and discuss the advantages and disadvantages of each.

Whether they intend to launch a small local business or a new venture projected to grow rapidly, all entrepreneurs must decide which form of legal ownership best suits their goals: sole proprietorship, partnership, or corporation. Because this choice affects a host of managerial and financial issues, few decisions are more critical. Entrepreneurs must consider their own preferences, their immediate and long-range needs, and the advantages and disadvantages of each form. Table 3.1 compares the most important differences among the three major ownership forms.

Table 3.1

Comparative Summary: ...