Entrepreneurship and Small Business Management

Section 1: Sole Proprietorships and Partnerships

Section 7.1 Summary
Entrepreneurs need to understand the advantages and disadvantages of the various forms of business available so they can choose the type that is the most appropriate for them. The easiest businesses to form are sole proprietorships, where the owner is the only one responsible for the activities of the business, and partnerships, where two or more people own a business and share the assets, liabilities, and profits. These business forms also carry the greatest liability for their owners. Joint ventures and strategic alliances are two types of partnerships that form for a specific project or mutual benefit. A partnership agreement, which spells out specific information regarding business responsibilities and money issues, can prevent problems when disagreements occur.

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