There are three primary forms of business organizations. They includesole proprietorships, partnerships, and corporations. Each of themhas its advantages and disadvantages (Hannigan, 2015). If I were tostart a business, I would prefer a corporation. This is due to itsmerits compared to the others.
A corporation has limited liabilities, which is not the case forother forms of business. This is because it is legally recognized asa separate entity from its owners. Consequently, I will not be liablefor debts of the company. The status will protect my property fromdebt collections. Secondly, the organization will have separate taxobligations from my personal responsibilities (Hannigan, 2015).Another reason why I would prefer this form of business is becauseits lifetime does not depend on me. When compared to soleproprietorship and partnership, a corporation is not dissolved whenthe owner dies. Therefore, it will be everlasting, even in my absence(Hannigan, 2015).
A corporation has more access to sources of capital. A soleproprietorship or partnership has limited methods of funding. Acompany can raise more resources through the selling of shares orborrowing from financial institutions. Additionally, it can expandits operations through mergers and acquisitions. It is alsorelatively easy to transfer the ownership of a corporation comparedto other forms of business (Hannigan, 2015).
However, there are several disadvantages of a corporation. Forexample, since the business organization is a separate entity, itresults in double taxation. Additionally, it has an independentmanagement, and, therefore, I am likely to lose its control(Hannigan, 2015). Despite these important aspects, I would prefer acorporation rather than a partnership or a sole proprietorship. Thisis due to the challenges associated with the two forms of business.
Hannigan, B. (2015). Company law. Oxford: Oxford Univ. Press.