Types of Businesses and Company Registrations
Sole proprietorship
This business is an individual owned organization. This business is the most attractive because of its simplicity and control over the business. * Liability-.This business has unlimited liability. The owner is responsible for everything. If the business begins to fail personal assets and business assets can be sought after to pay off debts. There is no distinction between the two assets. * Income taxes- Business owners in a sole proprietorship file a 1040 as well as a schedule C (“profit or loss from a business or profession”). The Proprietor’s personal income is supplemented by all profits of his business. This form of taxation is known as pass-through taxation, meaning there is no separate federal income tax reporting for the proprietorship. * Longevity/continuity: In the event the sole proprietor dies and planned steps were not properly carried out the business will cease. Sadly the family’s source of income is no longer available. Life insurance is an important need to the proprietor, it may be the family’s only source of income. Secondly a will is a must have with precise details on to whom and how the business should be carries out. It’s also important to pre-plan with his chosen representative, teaching them how the business is managed. * Control: The sole Proprietor may choose to directly run his business or hire others to manage for him. Being in total control of the business the proprietor is solely responsible for the major functions of his business. Leaving him with the responsibility of guiding his business down the path of success. * Profit retention: All profits belong to the owner. There is sole gain, no partners or stockholders to share proceeds with. * Location: One of the best things about a sole proprietorship is there are no limitations on the business. If the owner wishes he can expand, down size, move locations, or sell his business at will. * Convenience/Burden: A sole proprietorship has
This business is an individual owned organization. This business is the most attractive because of its simplicity and control over the business. * Liability-.This business has unlimited liability. The owner is responsible for everything. If the business begins to fail personal assets and business assets can be sought after to pay off debts. There is no distinction between the two assets. * Income taxes- Business owners in a sole proprietorship file a 1040 as well as a schedule C (“profit or loss from a business or profession”). The Proprietor’s personal income is supplemented by all profits of his business. This form of taxation is known as pass-through taxation, meaning there is no separate federal income tax reporting for the proprietorship. * Longevity/continuity: In the event the sole proprietor dies and planned steps were not properly carried out the business will cease. Sadly the family’s source of income is no longer available. Life insurance is an important need to the proprietor, it may be the family’s only source of income. Secondly a will is a must have with precise details on to whom and how the business should be carries out. It’s also important to pre-plan with his chosen representative, teaching them how the business is managed. * Control: The sole Proprietor may choose to directly run his business or hire others to manage for him. Being in total control of the business the proprietor is solely responsible for the major functions of his business. Leaving him with the responsibility of guiding his business down the path of success. * Profit retention: All profits belong to the owner. There is sole gain, no partners or stockholders to share proceeds with. * Location: One of the best things about a sole proprietorship is there are no limitations on the business. If the owner wishes he can expand, down size, move locations, or sell his business at will. * Convenience/Burden: A sole proprietorship has