Small Business Idea Paper
Susan J. Schunke
Dale E. Stoeber
Acc 561
May 9, 2013
A corporation “A corporations’ advantage on the balance sheet has two main sections retained earnings and “contributed capital” this is money the company receives from selling its stock,” (Merritt, 2013).
The difference between a sole proprietorship and a partnership is one person is a sole proprietor while two or more people are a partnership. However a sole proprietor must be able to handle any problem and come up with a solution on his or her own. In a partnership there is shared control in the business and they also receive tax breaks. However when problems arise the partners can come up with a solution together.
“A balance sheet shows how much a company is worth overall,” (Abrams, 2003, p. 239). Therefore the balance sheet is the most important financial statement. This is the main statement that small businesses use according to the United States small business administration website (www.sba.gov). There are four financial statements for sole proprietorships and partnerships. Each financial statement has advantages and disadvantages.
The advantages of a sole proprietorship are:
1) The business is easily formed or dissolved
2) Sole proprietorship can be as easy as printing up
business cards or hanging a sign announcing the
business.
3) Low start-up costs and operational overhead
4) The sole proprietor owns all of the profits
5) Sole proprietorships have fewer regulations
6) All income is added to the owners personal tax form
The disadvantages are as follows:
1) Sole proprietors are personally responsible for all
obligations of the business, including actions of any
employee representing the business.
2) In most cases, if a business owner dies, the business
dies as well.
3) It's common for funding to be in the form of...