Comparison of Sole Proprietorship, Partnerships and Corporations

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Business Units
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Introduction
A business unit is an organization or part of the organization that operates
and functions independently. It is a profit making unit which is focused on market
segments and enhancing production of a firm. This essay compares the features of
three forms of business units which are partnerships, sole proprietorships and
corporations.
Sole proprietorship
It is a business that is owned by one person. The owner enjoys the profit
alone since they are personally liable and takes risks too. In this type of business, a
small amount of capital is needed to start. A sole proprietorship has the following
advantages; a few legal procedures are involved in forming it, sole proprietors make
decisions on their own and have full control of the business (Döckel and Ligthelm,
2015, pp.59). More so, this type of business has disadvantages which include, taking
all responsibilities and decisions of the business, the owners suffer loss alone, it can
be difficult for the owners to raise capital on their own. In a situation where the
owner dies, there is discontinuity of the business (Sarmento and Renneboog, 2016,
pp.101). This type of business also has unlimited liability that is if the owner has
business debts, their personal assets can be used to pay off the debts.
Partnerships
They are types of businesses that are owned by two of more people. The
source of capital in this type of business is through contributions from the partners.
Each partner is liable to the debts of the partnership. A partnership has the following