Business Organization Formation Difficulty and Expense
What is the order of difficulty and expense when forming a business organization?
a. corporation, sole proprietorship, partnership
b. corporation, partnership, sole proprietorship
c. partnership, corporation, sole proprietorship
d. partnership, sole proprietorship, partnership
e. sole proprietorship, partnership, corporation.
Final answer:
The order of difficulty and expense in forming a Business Structures is: corporation, sole proprietorship, partnership.
Explanation:
The correct order of difficulty and expense, from most to least, when forming a business organization is: a. corporation, sole proprietorship, partnership.
A corporation is the most complex form of business organization. It requires more legal and bureaucratic procedures, including permission from the national and state governments to incorporate. Additionally, forming a corporation often involves higher expenses due to fees and taxes. In contrast, a sole proprietorship is the simplest and least expensive form of business organization. It is owned and operated by one person, and there are no special taxes or legal requirements.
A partnership falls in between, where two or more individuals share the ownership and responsibility of the business. While it is less complex than a corporation, it may still involve legal agreements and potential conflicts.