Identify the characteristics of a sole proprietorship and a partnership. Stephen is a carpet and flooring installer. He is an employee of "The Flying Carpet," a local carpet and flooring store. He has substantial experience in the carpet and flooring business and wants to open his own retail carpet and flooring store. Stephen's best friend, Sally, also works in the carpet and flooring business as a sales person. Stephen is convinced that he is smarter than his current employer and could be more successful. Stephen is uncertain, however, whether he should form his business as a sole proprietorship and hire Sally as an employee, or whether he and Sally should form the business as a partnership. Stephen has $20,000, and Sally has $50,000, that they could invest in a business venture. Stephen comes to you for advice.

1. Explain to Stephen the benefits and liabilities of each of those forms of business organization.
2. Indicate to Stephen what additional information  would better advise him about his choice of business organization.

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1 Benefits and liabilities of each form of business organization Sole Proprietorship Benefits A sole proprietorship is easy to set up and gives you fu... View the full answer