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Accounting

  • Date Submitted: 06/29/2014 06:32 PM
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David Ragan SID# 55836   06/05/2014
BAM 110 Introduction to Accounting
Unit-1, Question # 2


Question #2
Discuss the advantages and disadvantages of sole proprietorships, partnerships, and corporations.




      When starting a small business, there is many valid questions the soon to be owner needs to lie out and examine. The top of the list ranks, how they would like to be noted and or represented as a business—as a sole proprietor, partners, or a corporation.
      Sole proprietors are responsible for all aspects of the business. A sole proprietor must find a way to attain money. While a sole proprietor who has many assets may easily be granted a loan, others without as many resources will have a more complicated time, beginning their adventure.   This is because sole proprietors are financially responsible for their business, no matter if it fails or succeeds. If the business succeeds, the owner receives all the assets if it fails; the owner is responsible for paying back everything that they borrowed to start the venture. The owner sets schedules and business advancements, one can take on as many accounts as he would like—this can also create a problem. The owner is solely responsible for completing all of these tasks. While starting a sole proprietorship is easy, there is great risk involved. Owners must carefully consider how much they wish to risk in order gaining from their business plan.
      Partnerships, which are very similar to sole proprietorships, are with multiple persons, not just one. Having many people complete various tasks assists in the startup of a business. Unrealistically thinking is that one person for the business could: envision a product, create a demand, supply, and distribute all products a company is hoping to produce. Very unlikely and in most business cases never happens. With a partnership, there is more than one individual who can bring various strengths to the business. Many companies, especially family...

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