A SOLE PROPRIETORSHIP is described as a business entity which has no separation of business and personal assets/liabilities. The "Sole" refers to having but one owner who takes on the responsibilities (good AND bad) of the company.
Advantages: More simple to form, simpler taxes, less government regulations, less complex company structure.
Disadvantages: Complete personal liability and loss potential, harder to obtain financing, no perpetuity - cannot sell or transfer ownership, the business dies when the owner leaves, retires or dies and so does the Arizona Contractors License.
By definition, a PARTNERSHIP is a business entity of more than one owner. The owners of a partnership share all profits and losses of the company equally. There is no separation of business and personal assets/liabilities. Roughly, it's a business marriage of two or more sole proprietorships by Partnership Agreement.
Advantages and Disadvantages are similar to the Sole Proprietor. Change in ONE or MORE of the partners results in the extinction of the Partnership and loss of the Arizona Contractors License. Both Limited and General Partnership structures carry business losses and risk to the partners.
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