Final answer:
A sole proprietorship, which is the least expensive type of business ownership to start, offers complete control to the owner but comes with the downside of unlimited personal liability and potential challenges in raising capital.
Step-by-step explanation:
Contrary to the belief that a sole proprietorship is the most expensive type of business ownership to start, it is actually one of the least expensive. When comparing different types of business ownerships, such as partnerships, and corporations, sole proprietorships usually require less capital to begin. The main expenses for a sole proprietor may include a business license, initial inventory, and marketing costs, which are typically lower compared to the capital required for partnerships or corporations that might need significant upfront investment for legal services, higher inventory volumes, or more extensive facilities.
Sole proprietorships are the most numerous due to their ease of formation and the complete control they offer to the owner. However, they can also be the least profitable due to limitations in capital and resources, which can affect scalability and growth potential. The main advantage is control and simplicity, while a prominent disadvantage includes unlimited personal liability, which could risk the owner's personal assets. In terms of liability, corporations are the entities that offer the least amount of personal liability to the owners, as the business is a separate legal entity.