Businesses and Proprietorship - 2001 Words

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 individuals 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 theShow MoreRelated The History and Role of Accounting in Business Essays1533 Words   |  7 Pagesor Service Market Stakeholders are buyers of products or services and vendors to the business. Examples of Product or service market stakeholders are customers and suppliers. Government stakeholders have an interest in the economic performance of businesses, which in other words they collect taxes and fees from the business and its employees. 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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 longRead Mor eComparing Types Of Business Ownership1331 Words   |  6 Pages Comparing Types of Businesses Name: Sabrina Bhinder Date: September 10th, 2014 In the space below, explain each of the following terms and provide an example. Forms of business ownership (5K marks) 1. Sole proprietorship †¢ A business that is just owned by only one person, who receives all the profit for everything. Example of a sole proprietorship can be a hairdresser that buys a chair for their business and can get customers directly for them. 2. 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When founding a new business, there is always one question that arises: Which business structure is the most efficient? The oldest and basic business structure of all time is the sole proprietorship structure. It is alsoRead MoreThe Importance Of Business Structure1145 Words   |  5 Pagesreturns and they are taxed as the individual level (Steingold, 2015). In a sole proprietorship, the owner and the business are one-in-the-same. However, they are liable for any debts that the business accrues and put their personal assets at risk for the business’s liabilities (Johnson, 2015). Despite the liability associated with a sole proprietorship, it is still often the best choice for many small businesses because its simplicity and its inexpensive nature; most sole proprietors are unlikelyRead MoreDifferent Forms of Business: Exploring Definitions and Scenarios1029 Words   |  4 Pagesfar different than purchasing a new television from a nationally-operated chain. While many people understand that certain differences between these types of businesses exist, it is far less common for an individual to understand the specifics. The world of business is vast and varying, containing categories such as the sole proprietorship, the partnership, the limited liability partnership, the limited liability company, the s-corporation and franchise. In beginning to understand the differencesRead MoreWhy Is Raising Capital Critical For Success Of A Business?1478 Words   |  6 Pagescapital is critical to the success of a business. This is something you need more than little. Capital will be a businesses financial cushion. Investors, Banks, Credit Cards, grants or a simple loan from family is the start to gaining capital to start a business. This is critical when with no financial support you can be out of business. If you were to start any one of three types of businesses, and had access to all the resources needed, what kind would start and why? Services is a business I wouldRead MoreBusiness Impact Of Business On Business854 Words   |  4 Pagesorder to secure the future success of the business it is important to select, plan, and organize the ideal business that fits best. The sorts of business substance picked comprise of three regular structures know as sole proprietorship, partnership, and corporation. Sole proprietorship is a business structure in which one can operate and work on its own. It is the most straightforward and fastest approach to set up an operation. Many sole owners do business under their own name and many others like