There are two approaches to studying the topic of organizational forms.
Before looking at those approaches, here are the PowerPoint slides from my lecture on organizational forms:
Here's the Study Guide for the Course's First Week:
The traditional approach takes each form and analyzes their key characteristics. And that's something we'll do as well.
- It's important to know that the Corporate form includes an advantage of "limited liability" and a disadvantage of "double taxation."
- General Partnerships are problematic because of the joint and several liability they impose on their partners, but offer great flexibility when it comes to distributing income, expenses and tax-preference items.
- Sole proprietorships, last but not least, are extraordinarily simple and don't burden the entrepreneur with administrative demands and expenses.
Consider though another approach that starts with the question, "Which organizational form best fits my business?"
Answering this question requires understanding your business's needs. And it's a better approach to making the right choice.