Paper
Small-Business Idea
Small-Business Idea
Starting a new small business can be tedious and time consuming. When starting one’s own small business it is important to know what type of business organization one wants to open and what type of business it will be. Here one can find information regarding the four types of business organization, financing statements with each type, consequences associated with each type, and the type of business that Penny Garriott and Jim Lucas want to open in the near future. Along with an explanation of the business Penny and Jim want to open there will be an inclusion of information pertaining to what type of business organization they chose and the rationale for doing so.
Four Types of Business Organization There are four basic types of business organization these are sole proprietorship, partnership, C Corporation, and S Corporation. Each has advantages and disadvantages that can help a new or potential business owner decide what type of business to open. A sole proprietorship is an excellent concept for a small business. Income that the company makes goes either back into the company or into the owner’s pocket. This type of business is easy to start up and operate with a good business plan (Choosing the Legal Form of Ownership for Your Business, 2012). The simplicity of this type of business organization can be appealing to newcomers in the business world. The primary disadvantage of a sole proprietorship is that all costs or debts incurred by the business are owed by the owner. Tax returns for the business are filed with the individual owner’s taxes and any taxes due are paid per the owner’s individual tax return. If the company was to have litigation brought against it or have outstanding debt personal property can be seized as a means to pay for the debt owed. Sole proprietorships also lose some tax benefits that other types of business organizations receive, though, this can vary state to state. Partnerships have
Small-Business Idea
Starting a new small business can be tedious and time consuming. When starting one’s own small business it is important to know what type of business organization one wants to open and what type of business it will be. Here one can find information regarding the four types of business organization, financing statements with each type, consequences associated with each type, and the type of business that Penny Garriott and Jim Lucas want to open in the near future. Along with an explanation of the business Penny and Jim want to open there will be an inclusion of information pertaining to what type of business organization they chose and the rationale for doing so.
Four Types of Business Organization There are four basic types of business organization these are sole proprietorship, partnership, C Corporation, and S Corporation. Each has advantages and disadvantages that can help a new or potential business owner decide what type of business to open. A sole proprietorship is an excellent concept for a small business. Income that the company makes goes either back into the company or into the owner’s pocket. This type of business is easy to start up and operate with a good business plan (Choosing the Legal Form of Ownership for Your Business, 2012). The simplicity of this type of business organization can be appealing to newcomers in the business world. The primary disadvantage of a sole proprietorship is that all costs or debts incurred by the business are owed by the owner. Tax returns for the business are filed with the individual owner’s taxes and any taxes due are paid per the owner’s individual tax return. If the company was to have litigation brought against it or have outstanding debt personal property can be seized as a means to pay for the debt owed. Sole proprietorships also lose some tax benefits that other types of business organizations receive, though, this can vary state to state. Partnerships have
References: Choosing the Legal Form of Ownership for Your Business. (2012). Retrieved from http://www.asbtdc.org/DocumentMaster.aspx?doc=2864 Comparison of the C and S Types of Corporations. (2012). Retrieved from http://www.ehow.com/info_8067092_comparison-types-corporations.html