The three primary forms of business are sole proprietorships,partnerships,and corporations.You are contemplating starting a business.For each of the following proposals,explain which of the three types of businesses would be most appropriate.In each case describe the advantages and disadvantages of your choice.
(a)You are a music lover and are disgusted with the selection of compact discs available at the stores near your college.So,you decide to open up a store selling new and used compact discs.
(b)After a late night cram session,you and your roommate are in need of some pizza,but no restaurants are open.You decide to open an all night pizza parlor.
(c)You have an idea that will make you a billionaire before you graduate from college: a pizza delivery service - from any restaurant to any dorm.In order to make your revenue goal a reality,a local venture capital firm has informed you that you will need to nationally franchise your operation.

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The Answer is (a)The clear choice here would be to open up a sole proprietorship.It's quick and you get to be your own boss.However,it may be hard to get funding to stock your store,and if the store goes bankrupt,you face unlimited liability.(b)Since you and your roommate intend to split both the pizza cooking duties and the profits,you likely will want to form a partnership.Of course,there are some risks: you might have a hard time getting funding,and you could really get sick of your roommate.And you are both fully responsible for paying the debts of the partnership.(c)In order to create a nationally franchised delivery service,you will probably decide to form a corporation.This increases your ability to get funds and limits your personal liability.However,it means that you will likely need to hire an accountant and worry about whether all your franchisees are doing a good job so as to maintain the good reputation of your company.And your corporation will be subject to corporate income taxes.

The Three Primary Forms of Business Are Sole Proprietorships,partnerships,and Corporations