Explain how each business structure might and might not be advantageous.

Solo Proprietorship. A sole proprietorship allows the owner to retain all of his profits, and it is relatively simple to set up and close down the company. There are disadvantages too, like unlimited personal liability and difficult access to funding.

Partnering: Partnerships can prove to be beneficial because they allow two individuals to share in the risks, costs and work load of a venture. A partnership can make it easier to obtain funding because banks consider multiple owners as less risky than one owner. However, partnerships can lead to disagreements among partners. If disputes do arise, it may be more complicated for lawyers to file paperwork.

Corporation: Corporations have advantages like limited personal liability, greater access to capital through stock offering/IPOs, and tax benefits due to the differences in tax rates between corporations and individuals. There are disadvantages, such as high setup fees and complex regulations to be followed with regard to corporate governance laws. Double taxation on corporate profits is also possible (once received by the corporation, then when it’s distributed to shareholders).