Most Popular Type Of Business Organization

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Sole Proprietorship Description • Simplest and oldest business form to establish • Does not require legal expertise or fees when forming • Most popular type of business organization comprising • Excellent option for business that only have a small number of employees (Stevick, G.E., 2006). Two Advantages 1. The owner has complete control over the business, and has all decision-making power. 2. Owner retains all profits made by the organization. Two Disadvantages 1. Unlimited and unshared responsibility means there can be concerns related the payment of debts and legal action being taken against the owner. 2. If the sole proprietor cannot pay his or her business debts or expenditures, he or she is still required to pay for them, as there is no distinction between personal assets and liabilities and business assets and liabilities. Liability Owner has unlimited and unshared responsibility for business Income taxes The business owner’s personal taxes and business taxes are taxed as a single unit with the business owner only to having to file a 1040 tax form along with a Schedule C (“Profit or Loss from Business Profession”) (Stevick, G.E., 2006). Continuity of the organization Expansion of a sole proprietorship can be difficult, as the monetary resources to support such a move come from the owner’s personal assets. Additionally, if the expansion moves into another state, there are additional taxation and compliance regulations to consider. Control The owner has
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