Imagine the government has released funds for creating small businesses. You are interested in establishing a small business, and you must decide which of the four forms of business organization would best suit your unique product or service. Consider legal, tax, accounting, and other implications when selecting from the four business types.
Write a paper of no more than 1,250 words discussing your small-business idea. Include the following:
• The advantages and disadvantages of the four different forms of business organization, which include the following:
Sole proprietorship - The advantages of a sole proprietorship include being your own boss, having lower personal tax rates and netting more profit directly
Another advantage to owning a sole proprietorship is the ability to sell or transfer the company at any point of its existence. The sole proprietor may even pass the company to an heir. As owner of a sole proprietorship, one may also hire as many employees and an independent contractor as one chooses.
Sole proprietorships are most attractive to those entrepreneurs that are seeking to create a business with the least paperwork and formality, and at the lowest cost. Opening a sole proprietorship is relatively easy (albeit risky), and particularly advantageous to the businessman or woman that is having difficulty securing investors. Also, while the legal costs to opening a corporation may often be very steep, they are relatively minimal for opening a sole proprietorship.
The disadvantage of a sole proprietorship industry is that there is only a single owner having limitless liability. This means his individual property can also be used in the business to pay off his arrears.
• Easy to set up
• More capital can be brought into the business.
• Partners bring new skills and ideas to a business
• Decision making can be much easier with more brains to think about a problem.
• Partners share responsibilities and duties of the...