Homework week 1 - Homework week 1 1.2 What are the four...

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Homework week 1 1.2 What are the four primary disadvantages to the sole proprietorship and partnership forms of business organization? Owner has unlimited liability for the business debts. Owners can lose some lucrative tax-free fringe benefits because they cannot participate in company-funded employee benefit plans like medical insurance and retirement plans. Second, since the owner and the business are inseparable, whoever sues the business actually sues the owner. The owner's personal exposure is unlimited. Finally, the business owner is personally liable for the debts of the company, and unfortunately, personal assets can be taken to pay company obligations. Life of proprietorship is limited to the owner’s life. - What benefits are there to these types of business organization as opposed to the corporate form? A partnership, as opposed to a corporation, is fairly simple to establish and run. No forms need to be filed or formal agreements drafted (although it is advisable to write a partnership agreement in the event of future disagreements). The most that is ever required is perhaps filing
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This note was uploaded on 01/24/2011 for the course FINANCE MGM6643 taught by Professor Garcia during the Spring '10 term at Uni San Francisco de Quito.

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Homework week 1 - Homework week 1 1.2 What are the four...

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