A Sole Proprietorship is a form of business that is owned and operated by one person. A sole proprietorship can be started with no state filing that is required. The sole proprietor has unlimited responsibility for all business gains, losses, and debts. A sole proprietorship does not distinguish between personal and business assets. * Liability: A sole proprietorship has unlimited liability. This can affect all the owners’ assets, both business and personal. * Income Taxes: A sole proprietorship does not require the owner to file business taxes separately. Business revenue or loss is filed on owners yearly tax filings. * Longevity / Continuity: A sole proprietorship does not provide a business longevity or continuity. If the owner becomes ill the company can be brought to a standstill, and the business will cease to exist at the death of the owner. * Control: The owner of a sole proprietorship business has unlimited control over all aspects of the business. * Profit Retention: The owner of a sole proprietorship retains all the business profits. * Location: A Sole Proprietorship must file appropriate business licensing forms. There are no extra requirements for moving or adding a location for a sole proprietorship. * Convenience / Burden: A sole proprietorship is easily created and maintained. However, it requires the owner to carry the burden of all of the businesses financial outcomes.
A general partnership is the most basic partnership which is created by an ownership agreement between two or more people in an unincorporated business. * Liability: Each partner can be held jointly and personally liable for all debts and taxes. * Income Taxes: A general partnership requires owners to file any revenue on their respective personal business taxes. * Longevity / Continuity: A general partnership will end if any partner withdrawals or upon a partners death. Unless the agreement between the partners allows for the purchase of that partners share to be divided by all remaining partners. * Control: Each partner in a general partnership has equal rights to all business matters. * Profit Retention: Profits in a general partnership are equally shared by all partners. * Location: A general partnership must file appropriate business licensing forms. There are no extra requirements for moving or adding a location for a sole proprietorship. * Convenience / Burden: A general partnership retains the burden of financial outcomes of the business affecting the personal assets of the owner. Also, partners are obligated to fulfill promises and obligations that any other partner undertakes. This could leave partners obligated for things and decisions they may not agree with. LIMITED PARTNERSHIP:
A limited partnership is a partnership where one or more partners are general partners and at least one partner is a limited partner. Limited partners act as silent partners only helping bring capital or other investments to the business. Limited partners are also protected from liability. * Liability: General partners still have unlimited liability in a limited partnership while limited partners are only liable for their investments and capital put into the business. Limited partners do not risk their personal assets as do general partners. * Income Taxes: In a limited partnership all partners’ profits or losses are reported by each partner on their respective income tax filings. * Longevity / Continuity: It is imperative to properly write the limited partnership agreement so that limited partners plan for their duration and in the event of their death, illness, or departure so that it will not result in the dissolving of the partnership. * Control: A limited partnership leaves all control over the business to the general partners. Limited partners are silent and have no control over the business operations. * Profit...