How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask The Professor Your Own Question

The Professor
The Professor, Taught at USC Years Ago
Category: Homework
Satisfied Customers: 1387
Experience:  Engineering Degree, Tutoring Experience, USC Faculty (Retired)
Type Your Homework Question Here...
The Professor is online now
A new question is answered every 9 seconds

In 200-300 words explain the differences between a ...

This answer was rated:

In 200-300 words explain the differences between a proprietorship, a partnership, and a corporation. Why would an entrepreneur want to choose one over the other? If you were starting a new business, which would you choose? Why?
In a proprietorship, the owner is just that: the owner. They are responsible for providing or obtaining the capital for operation of the business. If there is a lawsuit and subsequent judgment against the business the proprietor's assets could be taken to satisfy the judgment. If the proprietor has few assets this is not a concern.

In a partnership (for ease of discussion let us assume two equal partners) both parties are responsible in the same way that the proprietor was in the previous paragraph. The partners share the risks and rewards of the business. Each has equal ability to bind the partnership, incur debts, expose the business to risks, and handle the assets and cash of the partnership. Each partner is exposed to dishonest actions of the other partner. In the event of a judgment against one of the partners, the other partner is at risk as well.

In a corporation, the officers of the corporation act on behalf of the business. The corporation is an entity unto itself. It acts in accordance with it's charter and bylaws. Ownership of the corporation is evidenced by share certificates. The corporation maintains its own books and records. Activities of the corporation are taxed, and salaries and dividends of the corporation are also taxable. In the event of a judgment against a corporation, the shareholders are not at risk beyond the amount they paid for their shares.

Two different kinds of corporations are particularly suitable for small businesses: a "Limited Liability Corporation" and a "Subchapter S" Corporation. In an LLC, the corporation can be structured so that its activities are only taxed once. In an "S" corporation, the activities are reported on the individual income tax returns of the shareholders. If I were to start a new business, it would be based on the best qualities of the LLC and "S" corporations to limit liability, avoid double taxation, and allow for ease of management of the business.
The Professor and 4 other Homework Specialists are ready to help you
Customer: replied 8 years ago.
Awesome Job!
My pleasure.
Customer: replied 8 years ago.
I also left you good feedback and a bonus

You need to spend $3 to view this post. Add Funds to your account and buy credits.

Related Homework Questions