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A sole proprietorship is a business owned and operated by one individual
Easy to start
No profit sharing
Easy to windup
Secrets (information about business techniques)
No corporate taxes
Employee benefits i-e Medical insurance premiums not deductible(taxes)
Loss in absence
A Partnership is a legal relationship formed by the agreement between two or more individuals to carry on a business as co-owners.
Types of Partnership:
Relatively easy to start
The ability to raise funds
More skilled persons
No Loss in absence
Transferability is difficult
A corporation is defined as a legal entity or structure created under the authority of a state's laws, consisting of a person or group of persons who become shareholders.
No loss in absence
Easier to raise capital
Fringe benefits are tax deductible
Easy transferability of ownership
More expensive to form
More legal formality
Division of profits
Leaking of business secrets
The best form of organization is LLC(limited liability company).Its a hybrid form of partnership and corporation. Positive features of partnership & corporation are combined. i-e Members are having limited liability and for taxation it is treated like partnership.