Most states require stockholders to meet at least once annually and annual fees and taxes may be imposed on the corporation. In many instances, federal, state, and social security taxes have actually increased following incorporation. In that case individual stockholders are personally liable for the actions of the corporation. The most suitable choice for a given farm business depends upon how one or more of these factors affect the financial and personal well-being of the individuals involved. In the case of sole proprietorship, the primary advantage is total management control.
Resources are limited to that available to that sole proprietor.
The sole proprietorship offers little protection of personal assets which are not a part of the operation. It is the least effective in maintaining the operation at peak efficiency. Transfer of assets and estate planning also are difficult. The general partnership is similar to a sole proprietorship, but it involves more than one individual. The primary advantage of the general partnership over the sole proprietorship are additional resources.