Business Ownership Types
Own your business any way you want!
Being the only owner does have its benefits:
- It is easy and has low expense costs.
- You, as the owner, have complete control over all the decisions.
- Finallly, you recive all income made by the buisness adn all profits flow right into your own personal tax.
While this way of ownership does have its benefits, it also has some disadvantages:
- There are unlimited liabilties against the buisness.
- There is a great chance that you would youse personal funds/ loasns to support the business.
In a partnership two or more people share ownership of a single business, where the two owners set forth leagal agreements, profits are shard, and must decide on how each will contribute concerning time and capital.
The advantages of a partnership include:
- It is easier to raise funds.
- The profits from the buisness dont flow through a middle man, and go rigfht into the partners personal tax funds.
Whereas the disadvantages include:
- Profits must be shared.
- Some employees benefits are deductible from business income on tax returns.
- Partners are jointly and individually liable for eachothers actions.
A corporaton is a unique entity that is separate from those who own it, and its owners are considered its shareholder, that oversee all major policies and decisions. In a corporation the law does not distinguish between the buisness and its owners. Some famous ones include 711, Dell, and Expedia.
In a corportation there are many benefits:
- Shareholders have unlimited liablity.
- It can raise additonal funds through the sale of stock.
- May deduct the cost of benefits that it gives to its officers and employees.
Some disadvantages of a corportation are:
- The process requires more money and time than the other forms of organization.
- It is monitored by the federal, state and local agencies.
- There are more regulations that require paperwork.
- Overall there will be higher taxes.
Limited Liability Company
With any buisness structure there are benefits:
- The structure is taxed like a sole proprietorship.
- There is limited liability that provides there members protection from liability.
And there are som disadvantages:
- Unless the llc choses to be taxed like a corporation, they are subjected to self-employment taxes.
- There is a limited life, meaning if a member departs from the LLC then it does not exist.
Regulations all business ownerships have to follow:
- Business that hire employees need to follow regulations that pertain to the number of hours someone can work, the benefits that they will recive, working conditions that are up to code, and more.
-All buisness need to understand their specific requirements for conducting business. Fro example all farming industries need to follow the environment regulations and banned hazardous pesticides.