Discuss the various forms of business organisations with their respective merits and demerits.

1. Sole proprietorship

The vast majority of small businesses start out as sole proprietorships. These businesses are owned by one person, usually, the individual who has day-to-day responsibility for running the business. Sole proprietors can be independent contractors, freelancers or home-based businesses.

Sole proprietorship advantages :

• Owner receives all the profits
• Profits are taxed only once
• Owner makes all decisions and is in complete control of the company (could also be a disadvantage)
• Easiest and least expensive form of ownership to organize

Sole proprietorship disadvantages :

• Unlimited liability if anything happens in the business. Your personal assets are at risk (including your home in Missouri)
• Limited in raising funds and may have to acquire consumer loans
• No separate legal status

2. Partnerships

In a Partnership, two or more people share ownership of a single business. Like proprietorships, the law does not distinguish between the business and its owners. The _____ _________ ____ ________ ____ ___.
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