by: Camille Bradely
- A sole proprietorship is an unincorporated business owned and run by one individual with no distinction between the business and you, the owner.
- Advantages: easy and inexpensive to form, complete control and easy tax preparation.
- disadvantages: unlimited personal liability, hard to raise money and heavy burden
- Policies to follow: You need yo obtain the necessary licenses and permits. Regulations vary by industry, state and locality.
- Facts: Because you and your business are one and the same, the business itself is not taxed separately-the sold proprietorship income is your income.
- You do not have take any formal action to form a sole proprietorship.
- A partnership is a single business where two or more people share ownership.
- Advantages: easy and inexpensive, shared financial commitment, complementary skills and partner incentives for employees
- disadvantages: shared profits, disagreement among partners, and joint and individual liability
- policies: To form a partnership, you must register your business with your state, a process generally done through your Secretary of State’s office
- facts: For partnerships, your legal name is the name given in your partnership agreement or the last names of the partners
- theirs three types of partnerships: general partnership, limited partnerships and joint ventures.
What is a Limited Liability Partnership?
- A corporation is an independent legal entity owned by shareholders.
- Advantages: Limited Liability, Ability to generate capital, corporate tax treatment, and attractive too potential employees
- Disadvantages: Time and money, double taxing and additional paperwork.
- policies: A corporation is formed under the laws of the state in which it is registered. To form a corporation you’ll need to establish your business name and register your legal name with your state government. To register your business as a corporation, you need to file certain documents, typically articles of incorporation, with your state’s Secretary of State office.
- facts: Corporations are more complex than other business structures because they tend to have costly administrative fees and complex tax and legal requirements.
- For businesses in that position, corporations offer the ability to sell ownership shares in the business through stock offerings
"Corporation | The U.S. Small Business Administration | SBA.gov."Corporation | The U.S. Small Business Administration | SBA.gov. N.p., n.d. Web. 19 Sept. 2014.