Types of organization

Business Type	Features	Advantages	Disadvantages
Proprietorship	single owner unlimited liability personal income	easy to set up simple decision making profit taxed once only	owners’ wealth is exposed to risk difficult to raise fund firm may die with owner decision made by the owner only
Partnership	two or more people as co-owners unlimited liability income allocated to partners	easy to set up profit taxed once only	difficult to achieve consensus decision partner’s wealth exposed to risk potential capital shortfall if a partner leaves or die
Corporation	owned by stockholders limited liability firm pays corporate tax	limited liability inexpensive capital available management expertise unlimited life able to enter long term labour contract	Complex management structure Double taxation of income paid out as dividend