Introduction The company in question is involved in manufacturing where it produces a variety of wood products. It has been a sole proprietorship form of a business unit and currently. However, the owner has plans of converting the company to another form of business unit by considering various factors. However, the entrepreneur does not comprehend all forms of business units and thus he needs to make an informed decision before choosing the form of business that suits his situation. Discussion of Various Forms of Business Units Sole proprietorship Sole proprietorship is the simplest form of business organization as it is formed and managed by a single individual. With this form of business, the organization is not registered on its own, hence cannot be separated from the owner (Lau & Johnson, 2011). Moreover, the owner is entitled to all profits generated by the business at the end of a financial year as well as losses in case they arise. However, the owner is responsible over all debts and liabilities entered into by the business. In the formation of a sole proprietorship, the status automatically passes to the owner. However, for the business to be legal, the owner has to register and obtain the necessary licenses and permits. However, rules regulating the registration process differ in accordance to the location of the business and the industry. In terms of taxation, the owner has to withhold taxes and submit them to the relevant authority. Moreover, the business cannot be taxed separately since incomes generated are also the owner’s incomes. Advantages Sole proprietorship is cheap and easy to form for structural costs are quite low as compared to other forms of business units. In addition, legal costs in relation to obtaining necessary documentation, licenses, and permits are always at minimum. In addition, it is easy to prepare and file tax returns for the business is not taxed separately from the owner, which makes it easy to fulfill reporting requirement in relation to taxes. Decision making process is simplified and faster since the owner is the sole decision maker. Sale and transfer of properties takes place at the discretion of the owner, hence maintenance of secrets within the organization (Lau & Johnson, 2011, p. 236). Disadvantages In case the business falls into liability and is unable to pay, the owner is held liable for the debts and obligations of the organization. In addition, any liable act committed by the employees of the business is charged against the owner. In addition, the owner may not have expertise in all areas of management; therefore, he or she may find it difficult to run the entire business. Where there are no finances to start up the business, it is hard to raise capital, especially through seeking financial assistance from banking institutions. General partnership A partnership defines the relationship that exists between two or more people who have an aim of getting involved in business practices. In the course of carrying on a business, all parties involved share profits and losses as agreed. In the case of a general partnership, each of the partners contributes capital, skills, and even labor in return to sharing into the profits and losses of the business. Although, there is no regul