Describe the following 3 types of business organizations: sole proprietorships, partnerships, and corporations.
Describe 1 advantage and disadvantage for each of the 3 types of business organizations.
Describe the key users (i.e., sole proprietor, partnership, board of directors, CEO, COO, CFO, managers, etc.) of financial information.
Explain the types of day-to-day business decisions made by using financial statements.
Format any references used according to APA guidelines.
Sample Solution
Sole Proprietorship: A sole proprietorship is a business structure in which one person owns and operates the entire business. This type of business organization offers fewer legal protections to its owners, but also allows them to keep all of the profits after expenses are paid out.
Partnership: A partnership is a form of business organization in which two or more people share ownership of a single enterprise. Partners typically share profits or losses equally, agree on how decisions will be made, and determine how liabilities will be divided among them.
Corporation: A corporation is an independent legal entity owned by shareholders who are not personally liable for the company’s debts and obligations. Corporations must file articles of incorporation with their state's secretary of state office, pay taxes separately from its owners' personal income taxes, and can exist indefinitely even if its owners change over time.