Advantages and Disadvantages of Matching Costs and Revenues
(This is the 2nd submission.)
Group Discussion Board Forum 1
Shirley Johnson L25081202
Linda Meadows
This report addresses question 3, identify any special advantages and/or disadvantages the owner(s) experience in operating this form of business organization. I will also speak to the way in which a Christian owner’s faith will determine how the business is operated. I have selected the sole proprietorship form of business to discuss.
The sole proprietorship form of ownership is a business that is owned by just one person. This form of business ownership has several advantages. There are no partners. The single owner makes all decisions regarding the operation of the business. He/she decides what, where, and when regarding every aspect of the business. This is the form of business that most small businesses adopt for startup. It is the most simple and least costly form of business to formulate. The KC Source Link says, “Sole proprietorships own all the assets of the business and the profits generated by it.” It requires no legal formalities, except a license, and, in some states, a state tax identification number for the purpose of paying state sales taxes. The proprietor undertakes full responsibility for operation of the business and for all assets and liabilities. The owner is motivated to make a success of the business because the entire profit goes into his/her pocket. “However, an advantage is that a proprietorship’s income is not subject to a business income tax but is instead reported and taxed on the owner’s personal income tax return” (Wild, Shaw, & Chiappetta, 2011). Also, the sole proprietorship offers sever advantages including better control, because the owner’s eye is on everything, quick decision-making, because the owner does not have to consult with anyone else regarding decisions, freedom from government control, because it is the least regulated form of business, and it is the easiest form of business to dissolve, because the
Group Discussion Board Forum 1
Shirley Johnson L25081202
Linda Meadows
This report addresses question 3, identify any special advantages and/or disadvantages the owner(s) experience in operating this form of business organization. I will also speak to the way in which a Christian owner’s faith will determine how the business is operated. I have selected the sole proprietorship form of business to discuss.
The sole proprietorship form of ownership is a business that is owned by just one person. This form of business ownership has several advantages. There are no partners. The single owner makes all decisions regarding the operation of the business. He/she decides what, where, and when regarding every aspect of the business. This is the form of business that most small businesses adopt for startup. It is the most simple and least costly form of business to formulate. The KC Source Link says, “Sole proprietorships own all the assets of the business and the profits generated by it.” It requires no legal formalities, except a license, and, in some states, a state tax identification number for the purpose of paying state sales taxes. The proprietor undertakes full responsibility for operation of the business and for all assets and liabilities. The owner is motivated to make a success of the business because the entire profit goes into his/her pocket. “However, an advantage is that a proprietorship’s income is not subject to a business income tax but is instead reported and taxed on the owner’s personal income tax return” (Wild, Shaw, & Chiappetta, 2011). Also, the sole proprietorship offers sever advantages including better control, because the owner’s eye is on everything, quick decision-making, because the owner does not have to consult with anyone else regarding decisions, freedom from government control, because it is the least regulated form of business, and it is the easiest form of business to dissolve, because the
References: KC Source Link. http://www.kcsourcelink.com/startup/registrations-licenses-and-permits/forms- -of business-organization. Wild, J.J., Shaw, K.W. & Chiappetta, B. ACCT 211 Principles of Accounting 1. 2011. 11. The Holy Bible, New King James Version.