Advantages And Disadvantages Of The Different Forms Of Business

| A sole proprietorship is easy to create; there is minimal creation cost and time.The single owner has autonomy in decision making; sole owner makes all decisions related to the business and has complete ownership of business’s finances.

A partnership is an arrangement between two or more groups, organizations or individuals who work together to achieve common aims or who have common interests.

• Control: A sole proprietor has total control of the company and they make all the good decisions and they must deal with decisions that did not turn out the way they intend. The other notable factor in being a sole proprietor of a business is what would happen to the business if the owner became ill or died; typically the business would stop operations based on the structure and debts would need to be resolved as well as customer commitments would need resolving based on the type of business.

After the creation of a business plan, the next step to operating a business is the selection of an appropriate business structure. Different legal forms of business ownerships affect different managerial and financial factors from the business names to the tax obligations (Gregory, n.d.). The most common forms are sole proprietorship, partnership, cooperatives, and corporations. There are different types of corporations in the business world, but the two most general corporation types are S Corporation and Limited Liability Company (LLC) (Ferrell et al., 2013). The sole proprietorship is the easiest and most basic form of business ownership. It is owned and run by one individual, which is the proprietor. The individual is entitled to all profits and is responsible for all the business’s

The advantages to the sole proprietorship are single control over the business and its decisions, easy to start up, less regulations and paperwork burden that the other types of business. The disadvantages are unlimited liability for their company debts and actions. The law does not recognize any distinctions between the owner’s business assets and personal assets. Banks are very skeptical about lending to these types business because there is only one person to hold liable for repaying the debt.

A sole proprietorship is the simplest and most common structure chosen to start a business. It is an unincorporated business owned and run by one individual with no distinction between the business and you, the owner. You are entitled to all profits and are responsible for all your business’s debts, losses and liabilities.

Sole Proprietorship is the most basic type of business to establish. It’s where you own the company as a single owner and are responsible for its assets and liabilities. To pick this legal structure, you alone have to be the sole owner where there is no distinction between you and the business. With Sole proprietorship, although it is the most common structure picked, there are advantages and disadvantages to picking this structure. Advantages include 1) It’s easy and inexpensive to form. This structure is the simplest and least costly to establish, the main costs are mainly limited to gaining the correct licenses and permits to run your business. 2) You have complete control. Being the soul owner of your business, you have complete control over any decisions that are made. You aren’t required to consult with anyone else when you want to make decisions or change things around. 3) You have easy tax preparation. It’s easy to do tax preparation and tax reporting requirements within a sole proprietorship. The tax rates are the lowest within this business structure. The disadvantages include 1) Having unlimited personal liability. You have

Providing for your family is a requirement. Some men and women go to work daily in an effort to make sure bills are paid, and food is on the table. All jobs are not easy; some are mentally stressful, and others are hard on your body. With all this being said, the American dream is to go into business, someday. Some ways of going into business are through sole proprietorship, partnership, corporation and limited liability companies. This paper will discuss the different formation of a business and advantages/disadvantages, the tax and liability issue of each and the form of business I would choose if I started my own business.

A sole proprietorship is a type of business structure that is owned and operated by only one or two persons. Sole proprietorships are attractive to small entrepreneurs because they are relatively easy to start up than corporations. And also compared to corporations the owner of a sole proprietorship is eligible to all the profit that his/her small business makes. On the other hand, sole proprietorships can be risky as well because nothing is divided between the owner and the business. In other words, the owner remains personally liable for any losses or debts that the sole proprietorship may face. As well as they are responsible for violations committed by their employees. Sole proprietorship difficulties for an entrepreneur can best be described

A sole proprietor is the most modest and common structure chosen to start a business (SBA, 2016). Someone who owns an independent business is usually a sole proprietor. They are no legal action needed to form a sole proprietorship. Sole proprietors are entitled to all profits and are responsible for all your business’s debts, losses and liabilities (SBA 2016).

First of all, there are three legal forms of business, which consist of sole proprietorships, partnerships, and corporations. People can run a business in these three types of ways, which in some ways each type of business has its benefits and has its losses. Also, setting up a business needs to be planned out, and have expectations on how the business needs to run. People can’t just go out and start a business without having any plans. If a person did that, then that business would not last long at all. Picking which type of business an owner or owners want to set up depends on how well the owner or owners wants to protect their personal assets or business assets. The bigger the business the more protection the company has, however, it

Sole proprietorship is an independent business owned by one individual. Sole proprietorship businesses are relatively small and in most cases the financial resources of one person are adequate to cover operational expenditure.

In the business world, a partnership describes a relationship or association between two or more persons with a view to profit. A proper definition of partnership as in the Partnership Act is “Partnership is the relation which subsists between persons carrying on a business in common with a view to profit and includes an incorporated limited partnership.” Therefore, it has several advantages compared to other

Partnership is the relation which exists between persons carrying on a business in common with a view of profit and includes an incorporated limited partnership. In the section 1, 2 and 3 below, when mentioning about partnerships, the author aims at the general partnerships, not the limited partnership.

A partnership is legal relationship formed by the agreement between 02 or more people to carry on a business as co-owners. And the profit and loses also will be share between who are they acting as a partners of the business.