Acc 561 Week 2 Paper
Running Head: Four Types of Business
Brandon Mckinley
University of Phoenix
ACC/561
Introduction An Entrepreneur is a person who forms and operates a business. Entrepreneurs form and start companies by themselves, or with partners. Most of the time companies which are started by entrepreneurs are relatively small in size, but some grow into huge corporations, such as Microsoft which is owned by Bill Gates. Entrepreneurs have four different options when starting a business, which include a sole proprietorship, Partnership, limited liability company, and also a corporation. Each form has its advantages and also disadvantages depending on what the type of business is, and also what service it provides.
Sole Proprietorship Sole Proprietorships are the simplest form of a business and the most common in the USA. The sole proprietor is the one who does the work, basically they are the business. Just like any other form of business, these companies have advantages and also disadvantages. Some advantages include the fact that sole proprietorships do not cost a lot to start up, and also the owner has complete control to make any managerial decision he or she wants without having to consult with anyone. Other advantages of sole proprietorships is that the owner gains and receives all of the company’s profits without having to share with anyone, and this type of business can be sold or transferred whenever the owner decides to retire, also not having to consult with a partner. Disadvantages of a sole proprietorship include that the owners usually provide all of the capital for the company using their own personal funds, and also they are responsible personally for any debt that the business obtains. As far as taxes are concerned, the profit or loss from your sole proprietorship business is reported annually with your personal income using the IRS Schedule C form with your 1040 tax return. Businesses with less than $5,000 in expenses may be able to use the
Brandon Mckinley
University of Phoenix
ACC/561
Introduction An Entrepreneur is a person who forms and operates a business. Entrepreneurs form and start companies by themselves, or with partners. Most of the time companies which are started by entrepreneurs are relatively small in size, but some grow into huge corporations, such as Microsoft which is owned by Bill Gates. Entrepreneurs have four different options when starting a business, which include a sole proprietorship, Partnership, limited liability company, and also a corporation. Each form has its advantages and also disadvantages depending on what the type of business is, and also what service it provides.
Sole Proprietorship Sole Proprietorships are the simplest form of a business and the most common in the USA. The sole proprietor is the one who does the work, basically they are the business. Just like any other form of business, these companies have advantages and also disadvantages. Some advantages include the fact that sole proprietorships do not cost a lot to start up, and also the owner has complete control to make any managerial decision he or she wants without having to consult with anyone. Other advantages of sole proprietorships is that the owner gains and receives all of the company’s profits without having to share with anyone, and this type of business can be sold or transferred whenever the owner decides to retire, also not having to consult with a partner. Disadvantages of a sole proprietorship include that the owners usually provide all of the capital for the company using their own personal funds, and also they are responsible personally for any debt that the business obtains. As far as taxes are concerned, the profit or loss from your sole proprietorship business is reported annually with your personal income using the IRS Schedule C form with your 1040 tax return. Businesses with less than $5,000 in expenses may be able to use the
References: Rogers, N. (1999). Tax implications for a sole proprietorship. Retrieved from http://www.ehow.com/about_7447181_tax-implications-sole-proprietorship.html What is a corporation?. (2003). Retrieved from http://www.wisegeek.com/what-is-a-corporation.htm Partnership advantages and disadvantages. (2009). Retrieved from http://www.how-to-start-a-business-guide.com/partnership-advantages.html Startup, B. (2009, February 07). What are the advantages and disadvantages of forming a corporation?. Retrieved from http://businessaccent.com/2009/02/07/what-are-the-advantages-and-disadvantages-of-forming-a-corporation/