Business Ownerships

Below, are the 4 types compared.

Sole Proprietorship

Definition:

-There is one owner

-No legal difference between company and owner

Advantages:

-Easy to set up

-Little paperwork

Disadvantages:

-Lots of risks for the owner

Policies/Regulations:

-File tax forms to Internal Revenue service

-Pay due taxes

-Personal income tax

-Schedule C

-Schedule SE

-Schedule ES

Facts:

-The owner may engage in anything at any time

-If the spouse works in the company but is not a partner or an independent contractor, the company is still considered a sole proprietorship

Examples:

-Book Keeping

-Home Healthcare

-Financial Planner

-Landscaper

-Computer Repair service

-Catering company

-Housecleaning service

-Freelance writer

-tutoring

-virtual assistant

Partnership

Definition:

-One business is run by two or more people who are involved in all aspects of the business

Advantages:

-Easy to set up

-cheaper

-Little paperwork

Disadvantages:

-Liability of business debts is unlimited

-Each partner is responsible for their debts as well as the company's

-Disagreements

Policies/Regulations:

-Deficit Reduction Act

-GAO Report

-Long-term care insurance

Facts:

-Two different types of partnership: Limited & General

-Limited means that only one person is at risk whereas in General, both have much to lose

Examples:

-Warner Bros.

-Hewlett Packard

-McDonalds

-Microsoft

-Apple Inc.

-Google

-Ben & Jerry's

-Twitter

Limited Liability Partnership (LLP)

Definition:

-Some or all of the partners have Limited partnership

- It is a mix of a Corporation and a Limited Partnership

Advantages:

-Asset protection

-Liability protection

-Lower audit rate

-Raise capital

-Tax benefits

-Separate credit

Disadvantages:

-Not recognized as an actual business structure in every state

-Special taxes

-Individual partners do not have to collaborate

Policies/Regulations:

-Public Utility Holding Company Act

Facts:

-Must be authorized by the state

-Pays a franchise tax

Examples

-Ernst & Young (E&Y)
-PricewaterhouseCoopers
-Deloitte & Touche
-KPMG
-Cooper Christensen Law Firm
-Bassett Law Firm
-Fischer Law Firm
-Hogan Lovells US

Corporation

Definition:

-Company or group of people authorized to act as a single entity and recognized as such in the law

Advantages:

-Asset Protection

-Liability Protection

-Lower audit rate

-Raise capital

-Tax benefit

-Separate credit

Disadvantages:

-Double taxation

-Excessive tax filings

-Independent management

Policies/Regulations:

-Domestic Volunteer and service act of 1973

-National and Community service Trust act 1933

-Social media

Facts:

-Get started through a promoter

-Starts off by getting proper loans

Examples:

-7 Eleven

-ABC

-Adidas

-AMECO

-CBS

-Burger King

-Clorox