Differences Between Sole Proprietorship, Partnership, And Corporation

841 WordsOct 6, 20154 Pages
1. Discuss in details similarities and differences between sole proprietorship, partnership, and corporation? a. Differences: A sole proprietorship is a business that has a single owner who is responsible for making decisions for the company. A partnership consists of two or more individuals who share the responsibility of running the company. A corporation is one of the most recognizable business structures and has a separate identity from the owners of the company. One or more owners may participate as shareholders of a corporation. b. Similarities: Characteristics Sole proprietorship Partnership Corporation Formation Easy to form Need to fill documentation Need to fill documentation Ownership Owner Partner Shareholder Liabilities Unlimited liabilities Unlimited liabilities Members are not liable for the debt of the company 2. Explain the following corporate finance terms: Money market: One of the sections of a financial market where securities and financial instruments with short-term maturities are traded is called the money market. Capital market: Capital market is a market where buyers and sellers engage in trade of financial securities like bonds, stocks, etc. Primary market: The primary market is the part of the capital market that deals with issuing of new securities. Companies, governments or public sector institutions can obtain funds through the sale of a new stock or bond issues through primary market. Secondary market: A market where investors purchase

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