Fill This Form To Receive Instant Help
Fill This Form To Receive Instant Help
Homework answers / question archive / Describe how each of the following differs with respect to the three common forms of business ownership: Sole Proprietorship, Partnership, and Incorporation
Describe how each of the following differs with respect to the three common forms of business ownership: Sole Proprietorship, Partnership, and Incorporation.
A) Decision making
B) Raising money for start-up
C) Distribution of profits (or losses)
D) Taxation
The table below shows the differences between the three types of businesses:
| Characteristics | Sole Proprietorship | Partnership | Incorporation |
| A) Decision making | Business owner is sole decision maker. | Partners will be deciding based on unanimous decision. | Thru voting of the stockholders, majority vote wins. |
| B) Raising money for start-up | Infusion of money of the business owner or by applying for a loan. | Partners pool their funds to raise money for the start-up. | Raising money by selling shares in exchange for money. |
| C) Distribution of profits (or losses) | 100% of the profits or losses will be shouldered by the owner. | Distribution of profits or losses is based on the agreement of the partners. | Distribution of profits or losses is based on the number of shares owned. |
| D) Taxation | Based on the individual income tax. | Individual income tax on each partners. | Corporate Income Tax is used. |
