QUESTION 2 - FORMS OF BUSINESS (15 MARKS)

Grace, Charles and Peter are currently operating as separate sole proprietorships in the event planning business.

Separately, they are having trouble accessing capital and each of them finds operating the business individually very difficult, and are very concerned about the risk of being sued.They all know each other and have decided that they should combine forces to develop and expand the courier business with each taking an active role.

Grace, Charles and Peterdo not know what type of business entity to use.They have heard of the following entities: a general partnership, limited partnership and a corporation but do not know which one would best suit their needs.

Advise Grace, Charles and Peter on the advantages and disadvantages of each of the above mentioned entities, explain how they are different from sole proprietorships, and how each is registered.