Appropriate form of business ownership should include a consideration of the relative advantages and disadvantages of the three forms of business ownership, i.e. sole proprietorship, partnership, and corporation.
Sole proprietorship advantages include freedom, simplicity, low start-up costs, and tax benefits.
Sole proprietorship disadvantages include unlimited liability, lack of continuity, difficulty raising money, and reliance on one person.
Partnership advantages include larger talent pool, larger money pool, ease of formation, and tax benefits.
Partnership disadvantages include unlimited liability, lack of continuity, the difficulty of ownership transfer, and the possibility of conflict.
Corporation advantages include limited liability, continuity, greater likelihood of professional management, and easier access to money.
Corporation disadvantages include shareholder revolts, start-up costs, regulation, and double taxation (note: double taxation is not applicable in Hong Kong).
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