- Easiest and least expensive to create
- One person makes all the decisions
- The owner receives all the income from the business
- Profits flow directly to the owner’s personal income tax return
- Easy to dissolve the business
- Can be difficult to get funding
- Hard to attract high-caliber employees.
- Owner has unlimited liability and is legally responsible for all debts against the business
- Easy to establish
- Multiple owners make it easier to raise funds
- Profits flow directly through the partners’ personal tax returns
- Easier to attract high-caliber employees, especially if they have an opportunity to join the partnership
- Each partner is individually responsible for the actions of the other partners
- All profits must be shared with other partners
- When each partner has decision-making power, there are more opportunities for disagreements
- Partnerships have a limited life and must be dissolved if one partner withdraws from the business or dies.
- Easier to raise funds through the sale of stock.
- The cost of benefits that are provided to officers and employees are tax deductible.
- Shareholders are not liable for judgments against the corporation and cannot be held liable for the corporation’s debts.
- S corporations offer some tax benefit
- Forming a corporation requires more time, money, and paperwork than other business structures
- Tax laws that govern corporations can be complex, and accounting professionals will be needed in order to minimize tax liabilities
- Dividends paid to shareholders are not deductible from business income, which means they are taxed twice