Comparison of Business Structures: Pros and Cons

Sole Proprietorship

Easy to start and manage; Full control over decisions; Owner keeps all profits; Unlimited liability (owner is responsible for all debts); Limited access to resources; Harder to expand.

Partnership

Shared responsibility and workload; More capital and resources available; Easier to expand than a sole proprietorship; Unlimited liability (each partner is responsible for debts); Potential conflicts between partners; Profits must be shared.

Corporation

Limited liability (owners are not personally responsible for debts); Easier to raise capital by selling stock; Can continue operating even if ownership changes; More regulations and legal requirements; Double taxation (corporate and shareholder taxes); Decision-making can be slow.

Franchise

Recognized brand and customer base; Training and support from the parent company; Lower risk compared to starting a new business from scratch; High franchise fees and royalties; Limited control over business operations; Must follow strict franchisor rules.