Case Scenario:
As you know, there are three primary organizational forms: the sole proprietorship, the partnership, and the corporation. You form the organization according to your financial needs, scope of the business and business capacity.
Advantages: Now let us take the example of Sole Proprietorship. It is the easiest to form. No forms to be filled and without any complications. All that you need is to have a place of your business, adequate finance and clear business objective.
Disadvantage: If anything happens to the proprietor, the business is badly affected or it ends.Another roadblock is lack of finance.All the profit or losses are of the proprietor.
Partnership: They are unincorporated businesses.Partnerships must have at least two shareholders.
Advantages: Partnerships have more finance available as the other partner brings in additional funds. Two persons can take better decision than one.
Disadvantages: Liability of the partners is unlimited. Either of the partners can end the business.
Corporation: Corporations are the companies incorporated and must mention letters LLC after their name.
Advantages: Being a large organization, it is always involved in big projects needing more finance. It has perpetual continuity.
Disadvantage:
A Corporation is allowed to either distribute or retain its profit. This boon may be misutilised also by hiding the losses for a number of years.
Internal Control components include Control Environment, Risk Assessment, Control Activities, Information & Communication and Monitoring.