Businesses and Proprietorship

2001 WordsFeb 26, 20188 Pages
Businesses are started every day, and each one is different in its own special way, but no matter what type of business it is, a sole proprietorship, a general or limited partnership, a C or S corporation, or a limited liability it will still be affected in some way by seven basic characteristics. The characteristics of business; liability, income tax, longevity or continuity, control, profit retention, location, and convenience or burden. In this paper a description of each business type and how they are affected by the seven characteristics of business will be given, showing the clear advantage and disadvantages of each type of business. Sole proprietorship A sole proprietorship is a business that has no legal separate existence from its owner. The characteristics that are the greatest advantages to this type of business are its freedoms. A sole proprietorship has complete control and decision-making power over the business. There are no corporate tax payments and profits are not shared; however income and losses are taxed on the individual's personal income tax return. And this brings me to the disadvantages of owning a sole proprietorship. Liability is the biggest; it falls solely on the owner of the business. In the event that penalties or debts have to be paid, payments come from the personal assets of the owner. The burdens that come with maintaining the business and the standards of it fall on the owner despite the number of employees. The success of the
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