What are the three legal forms of business organization? What are their advantages and disadvantages?

There are three legal forms of business organization that are sole proprietorship, society and corporation.

Explanation:

Sole proprietorship: A company that has only one person and works for its own benefit. In almost all the world there are a large number of sole proprietorships which are usually small companies, the most common being for example a personal teacher, a bicycle workshop, etc.

Advantage:

- The owner receives all profits and profits.

- Independence

Disadvantages:

- There is unlimited liability so that all income can be used to pay debts.

- The owner performs several activities.

Company: company that has two or more people. In general, partnership companies are larger than sole proprietorships. The most common companies in society are finance and insurance.

Advantage:

- Raises more funds than sole proprietorship.

- Greater intelligence and administrative ability.

Disadvantages:

- The company dissolves when a partner dies.

- Difficulty to liquidate or transfer the company.

Corporation: The property (shares) of a corporation are its shareholders. Shareholders have profits by receiving dividends that are distributions of the earnings of the shares.

Advantage:

- They have a limited liability, they don't lose more money than they invested.

- The company has a long life.

Disadvantages:

- Higher organizational costs than in other business forms since they need to hire staff.

- Subject to greater government regulation.