Sole proprietorship is statistically the most common business form for in the United State. The business is unincorporated owned and operated by one individual. An advantage of sole proprietorship is the business can be simple and inexpensive to start. A Disadvantage of sole proprietorship is being the only thinker for ideas for decision making, advertising, etc. 1. Liability- There is an unlimited amount of liability because nothing separates you from the business legally. This means the owner is held responsible for everything. 2. Income Taxes- The business and you are considered the same in one. The owner may have to fill out an extra form, and still is accountable to pay his or her personal and business taxes. 3. Longevity- The longevity of the business depends strictly on the owner. The owner must place in there will if they want the business passed to another person otherwise the business ends with the owners death. 4. Control- The business is totally controlled by the owner on every aspect. 5. Profit Retention- All profits made from the business is the owners. 6. Location- If the owners wanting to relocate, requirements from the State moved too must be met before the business opens again.
General partnership is when a business is conducted by two or more people and shares the profit and losses. An advantage of general partnership is that two heads work better than one. More ideas our helpful when decision making becomes hard. A disadvantage of the business partnership becomes interesting when a partner thinks he/she deserves more of the profit. Deciding who gets how much can destroy a business. 1. Liability- The liabilities are similar to sole proprietor business in that the owners are held accountable for legal and financial crisis. 2. Income Taxes- Partnerships require specific tax instructions that require owners to register with State and other agencies to get a tax ID number. Partnerships are held responsible for a...
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