Although most new firms start out as sole proprietorships, few large firms are organized this way. Why is the sole proprietorship such a popular form of ownership for new firms? What features of the sole proprietorship make it unattractive to growing firms?

Although most new firms start out as sole proprietorships, few large firms are organized this way. Why is the sole proprietorship such a popular form of ownership for new firms? What features of the sole proprietorship make it unattractive to growing firms?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter15: Partnership Accounting

Section: Chapter Questions

Problem 1TP: While sole proprietorships and corporations are the most popular forms of business organization, the...

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Despite the fact that the majority of new businesses are sole proprietorships, only a small percentage of big corporations are structured in this manner. One reason single proprietorship is so popular among new businesses is its simplicity. How is the single proprietorship unfavorable to expanding businesses?
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