Comparative Analysis of Differenet Forms of Business

AHSAN JAVED 11P0023 MBA 1(A) Assignment 1 Corporate Finance Submitted to Sir kumail Rizvi Comparative compendium of different forms of craft organization Ownership A sole proprietary has only a oneness owner. A partnership has two or more owners. A corporation can contrive an unlimited chip of owners. Liability In Sole proprietorship the liability is unlimited owners are responsible for whatever profit the business gets and whatever loss the business incurs. In partnerships the profits and liability are distributed between the two or more owners according to their shares.In Corporations at that place is limited liability, and in exemplar of failure shareholders may lose their investment but he/she pull up stakes not be liable to any debts of the corporations. Life of the business The life-time of the business in sole proprietorship depends on the life of the owner. In partnerships, it ends with ending, bankruptcy of partner. In corporations, a corporation does not expire u pon the death of its shareholders, directors or officers. Excess to Capital In Sole proprietorship the oversupply to capital is very limited.In partnerships the excess to capital is more thus sole proprietorship but much less then corporations. Corporations have excess to great amount of capital. Management In sole proprietorship, single owner does all the management of the business. In partnerships, owners understanding on management is required. In corporations, board of directors appoints the management team. Ease of place up Sole proprietorship is quite smooth to setup and there are usually no legal agreements required. Partnerships are also easy to setup but there are legal agreements between the owners and usually some paperwork required.Corporations are more difficult and costly to set up, ofttimes requiring state applications, legal paperwork such as articles of incorporation, board resolution and affidavit. task Structure In Sole proprietorship, the business and the owner is treated as one so the tax is being filed on the owners income. In partnerships the tax is being filed on the incomes of the partners. In case of corporations, the tax is being filed on the shareholders on the dividends they receive as well as on the income of the corporation.