Law 531 Business Forms Worksheet
University of Phoenix Material
Business Forms Worksheet
There are seven forms of business: sole proprietorship, partnership, limited liability partnership, limited liability company (including the single member LLC), S Corporation, Franchise, and Corporation.
1. Research and provide three advantages and three disadvantages for each business form.
2. Provide a 100- to 200-word summary in which you provide an example business that you would start for each form. What is legally necessary to file in order to form that business? Discuss at least one of the advantages and one of the disadvantages of that form.
Sole Proprietorship
Advantages
1. Income taxes
2. Continuity of business
3. Control of business
Disadvantages
1. Liability
2. Closure of business
3. Difficulty raising capital
Summary
Sole priprietors are not that difficult to set up and maintain. For example, if someone were to start up a photography or salon business, then they are considered to be a sole proprietor. Being a sole proprietor means that you do not have to pay a supplier or default on any debts, but creditors may take the sole proprietors person possessions. Sole proprietors must report any and all business income or losses on their income tax return on the IRS form 1040 with a Schedule C attachment. Most cities require that a sole proprietor register the business. Once they do this, the person will receive a business license or tax registration certificate. As a sole proprietor, control of business is important because that person does not have to follow the rules or regulations someone else has put out. They are able to charge prices they see fit and can set their own hours. Difficulty raising capital can be a burden for most sole proprietors who want to set up shop. It can cost a substantial amount of money to lease space and purchase equipment. Without proper equipment, the business could have difficulty bringing in customers.
Partnership
Advantages
1. Easy to establish
Business Forms Worksheet
There are seven forms of business: sole proprietorship, partnership, limited liability partnership, limited liability company (including the single member LLC), S Corporation, Franchise, and Corporation.
1. Research and provide three advantages and three disadvantages for each business form.
2. Provide a 100- to 200-word summary in which you provide an example business that you would start for each form. What is legally necessary to file in order to form that business? Discuss at least one of the advantages and one of the disadvantages of that form.
Sole Proprietorship
Advantages
1. Income taxes
2. Continuity of business
3. Control of business
Disadvantages
1. Liability
2. Closure of business
3. Difficulty raising capital
Summary
Sole priprietors are not that difficult to set up and maintain. For example, if someone were to start up a photography or salon business, then they are considered to be a sole proprietor. Being a sole proprietor means that you do not have to pay a supplier or default on any debts, but creditors may take the sole proprietors person possessions. Sole proprietors must report any and all business income or losses on their income tax return on the IRS form 1040 with a Schedule C attachment. Most cities require that a sole proprietor register the business. Once they do this, the person will receive a business license or tax registration certificate. As a sole proprietor, control of business is important because that person does not have to follow the rules or regulations someone else has put out. They are able to charge prices they see fit and can set their own hours. Difficulty raising capital can be a burden for most sole proprietors who want to set up shop. It can cost a substantial amount of money to lease space and purchase equipment. Without proper equipment, the business could have difficulty bringing in customers.
Partnership
Advantages
1. Easy to establish