Click on the link below. After reading over the different types, what ownership

Question

Click on the link below. After reading over the different types, what ownership form might you choose for a small quadraplex (apartment) you wish to buy and manage yourself? Discuss the advantages and disadvantages of that form.

http://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business/choose-your-business-stru

Click on the link below. After reading over the different types, what ownership form might you choose for a small quadraplex (apartment) you wish to buy and manage yourself? Discuss the advantages and disadvantages of that fornm http://www.sba.gov/category/navigation- structure/starting-managing-business/starting- business/choose-your-business-stru

Explanation / Answer

For this kind of small scale business, the most apt form of business structure would be a sole proprietorship.

The primary advantage is that it fairly easy to manage with less documentation and structural formalities. The control remains with the person managing the business and he can take decisions on a sole basis keeping his and business interests in mind. It is good for running a business at a small scale and doing a test run of the core business idea.

The primary disadvantage is that the assets and liabilities of the business are merged with that of the individual owning the proprietorship. So a business liability actually becomes personal liability and personal assets can be attached in case the business turns insolvent. Raising funds can also be difficult due to reluctance of banks to lend to a sole proprietorship.

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