Essay old man with wings

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Words: 957
Pages: 4
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Treson Wallace 11/21/13
Economics period: 2

Economics

There are many kinds of business being constructed everyday weither or not it has to do with retail, culinary, or even the new convenience store being built down your street. Though they all look different on the outside each one has an economic foundation that was deprived solely off of the 3 economic institutions: proprietorships, partnership and corporation. These 3economic institutions have been the leading causes of why certain businesses are so successful today and why this occurred throughout history. When giving advise to uncle Luigi and aunt mama Lombardi di Vinci concerning what type of business they should pursue in before giving my opinion on the topic I wanted to inform them on some of the economic advantages and disadvantages on the 3 forms of business. First I want to talk about the opening a proprietorship. One advantage to opening this form of business is it’s easy to organize and manage. For example if someone has an idea, or opportunity to make a profit he or she decides to go into business and then do it once in business the owner has direct control over all operations. Another advantage is the owner enjoys the profits of good management without having to share them. For example if your business is doing well and there are a small amount of problems then your profits will go to you and only you. But there are also some disadvantages to pursuing a sole proprietorship. One disadvantage to pursuing a sole proprietorship is the owner has unlimited liability. Which in this case means that the owner is personally and fully responsible for all losses of debts.so for example if the business doesn’t do so well the owner’s personal possessions may be taken away to satisfy business debts. Another disadvantage of opening this form of business is that it is usually hard to raise financial capital. Generally a great deal of money is needed to set up a business, and even more is required to make it expand, and usually banks and other lenders do not want to lend money to new or very small businesses. These are just some of the advantages and disadvantages of opening or pursing a sole proprietorship. Although it sounds easy and evolves more freedom out of all 3 to pursue it is also the most difficult. The next form of business that I talked about with uncle Luigi and aunt Mamma Lombardi is a partnership. I told them that two or more persons jointly own a partnership. It has many disadvantages and advantages most of which is generally similar in many ways to a sole proprietorship. One advantage of opening a partnership is that just like a sole proprietorship it is also easy to organize and manage because more than one owner is involved. Generally each partner takes care of certain parts of the business like marketing another is production. Another advantage of partnerships usually attracts financial capital easier than proprietorships because they are generally a little bigger and if established have a better chance at getting a bank loan. But just like it’s companion proprietorship, partnerships also have their flaws. One disadvantage of opening a partnership is that each partner is fully responsible for the acts of all other partners. For example if one partner causes the firm to suffer a huge loss, each partner is fully responsible for the loss. Another major disadvantage is limited life. This means that the firm legally stops when a partner dies, quits or a new partner is added. A business can still however exist in the
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