Lit 1 Task 1
Sole Proprietorship is a business owned by one person, as distinguished from a partnership or
Corporation. Sole proprietorship is a company, which is not registered with the state as a limited liability company or corporation.
Some advantages of a sole proprietorship are that they have flexibility in operations. The sole proprietorship business is undertaken on a small scale. If any change is required in the operations, it is easy and quick to bring the changes. Another advantage in this type is the ease of promptness in decision-making, autonomy. When the decision is to be taken by one person, it is guaranteed to be quick. Thus, the entrepreneur, as a sole proprietor, can arrive at quick …show more content…
Limited partnership is a limited partnership occurs when two or more individuals agree to start a for-profit business. A limited partnership must consist of at least one limited partner and at least one general partner Specific advantages are tax benefits, the profits and losses in a limited partnership flow through business partners. They are each taxed on their personal income tax returns. The limited partners in the relationship get to share in the profits and losses, but they do not have to participate in the business itself. Also, a limited partner's liability for the partnership's debt is limited to the amount of money or property that individual partner contributed to the partnership.
C Corporation is a corporation that elects to be taxed as a corporation. The C corporation pays federal and state income taxes on earnings. When the earnings are distributed to the shareholders as dividends,