Small Business Idea Paper
Ryan Feemster
University Of Phoenix
Ms. Kessel Acct 561
Small Business Idea Paper
Week 2
12/24/2012
Small Business Idea Paper
A business can create large sums of income for an entrepreneur or entrepreneurs. Most future business owners have an idea of what type of service or product to offer. Deciding the type of business organization to become can be a tough decision. Whether the it be a sole proprietorship, partnership, C- Corporation, S- Corporation, or a Limited Liability Corporation, there will be many factors to take into consideration. It is important to be educated or familiar with each business organization along with implications and benefits. The reason why the proper business organization is important is because, as an entrepreneur picking the right business organization for the business he or she wants to pursue could be difference between success and failure.
Sole Proprietor
A sole proprietor is a business owned by one person. It is the easiest to form of the business forms. An advantage of a sole proprietorship is an individual proprietor owns and manages the business and is responsible for all business transactions. This can also be a disadvantage, because one person is responsible for the success of their business.
Tax Implications
According to Entreprenuer.com (2005),
Because a sole proprietorship is indistinguishable from its owner, sole proprietorship taxation is quite simple. The income earned by a sole proprietorship is income earned by its owner. A sole proprietor reports the sole proprietorship income and/or losses and expenses by filling out and filing a Schedule C, along with the standard Form 1040. Your profits and losses are first recorded on a tax form called Schedule C, which is filed along with your 1040. Then the "bottom-line amount" from Schedule C is transferred to your personal tax return. This aspect is attractive because business losses you suffer may offset income earned from other sources.
As a sole
University Of Phoenix
Ms. Kessel Acct 561
Small Business Idea Paper
Week 2
12/24/2012
Small Business Idea Paper
A business can create large sums of income for an entrepreneur or entrepreneurs. Most future business owners have an idea of what type of service or product to offer. Deciding the type of business organization to become can be a tough decision. Whether the it be a sole proprietorship, partnership, C- Corporation, S- Corporation, or a Limited Liability Corporation, there will be many factors to take into consideration. It is important to be educated or familiar with each business organization along with implications and benefits. The reason why the proper business organization is important is because, as an entrepreneur picking the right business organization for the business he or she wants to pursue could be difference between success and failure.
Sole Proprietor
A sole proprietor is a business owned by one person. It is the easiest to form of the business forms. An advantage of a sole proprietorship is an individual proprietor owns and manages the business and is responsible for all business transactions. This can also be a disadvantage, because one person is responsible for the success of their business.
Tax Implications
According to Entreprenuer.com (2005),
Because a sole proprietorship is indistinguishable from its owner, sole proprietorship taxation is quite simple. The income earned by a sole proprietorship is income earned by its owner. A sole proprietor reports the sole proprietorship income and/or losses and expenses by filling out and filing a Schedule C, along with the standard Form 1040. Your profits and losses are first recorded on a tax form called Schedule C, which is filed along with your 1040. Then the "bottom-line amount" from Schedule C is transferred to your personal tax return. This aspect is attractive because business losses you suffer may offset income earned from other sources.
As a sole
References: Banks, Ivana. (2010). Tips on Preparing a General Partnership Financial Statement. Retrieved from http://www.brighthub.com/office/entrepreneurs/articles/97557.aspx The Basics Of Sole Proprietorship. (2005). Retrieved from http://www.entrepreneur.com/article/77798# BizFilings. (2012). S Corporation Advantages And Disadvantages. Retrieved from http://www.bizfilings.com/learn/s-corporation-advantages-and-disadvantages.aspx Encyclopedia of Business. (2012). C Corporation. Retrieved from http://www.referenceforbusiness.com/small/Bo-Co/C-Corporation.html Einerhann, R. (2010). What are the legal implications of a partnership?. Retrieved from http://www.amazines.com/Law/article_detail.cfm/2206579?articleid=2206579 The Free Dicitonary. (2012). S Corporation. Retrieved from http://legal- dictionary.thefreedictionary.com/S+Corporation Kaufman, N. (2008). What kind of financial reports are minimally required of an LLC, and how often should they be made available to the partners? Morley, M. (2012). What Are Some Legal or Ethical Issues You Face as an LLC?. Retrieved from http://smallbusiness.chron.com/legal-ethical-issues-face-llc-18654.html Perez, W. (2009). Incorporating Your Business. Retrieved from http://taxes.about.com/od/taxplanning/a/incorporating_3.htm Perez, W. (2012). S-Corporation Accounting. Retrieved from http://taxes.about.com/od/scorporations/a/scorp_account.htm Rath, T. (2012). Consider the Tax Implications of an LLC Before You Create One. Retrieved from http://sbinformation.about.com/od/ownership1/a/llctax.htm Roberts, S. (2012). Financial Statements of a Sole Proprietorship. Retrieved from http://smallbusiness.chron.com/financial-statements-sole-proprietorship-14717.html Startup Legal. (2003). C Corporation. Retrieved from http://www.startup-legal.com/C- Corporation-(C-Corp).htm Tax Implications of C Corporation. (2012). Retrieved from http://www.allbusiness.com/accounting-reporting/corporate-taxes/1148-1.html#axzz2FqoLkAcT U.S. Small Buisness Administration. (2012). Limited Liability Company. Retrieved from http://www.sba.gov/content/limited-liability-company-llc