Examine the different type of business organizations - including advantages and disadvantages of each. Include in the analysis taxation issues related to each and the steps needed for dissolution.
ADVANTAGES - SOLE PROPRIETOR
?A sole proprietor has complete control and decision-making power over the business.
?Sale or transfer can take place at the discretion of the sole proprietor.
?No corporate tax payments.
?Minimal legal costs to forming a sole proprietorship.
?Few formal business requirements.
DISADVANTAGES - SOLE PROPRIETOR
?The sole proprietor of the business can be held personally liable for the debts and obligations of the business. Additionally, this risk extends to any liabilities incurred as a result of acts committed by employees of the company.
?All responsibilities and business decisions fall on the shoulders of the sole proprietor.
?Investors won't usually invest in sole proprietorships.
A sole proprietorship would be ideal if you wanted to go into business alone.
ADVANTAGES - PARTNERSHIP
? You have a shared financial commitment.
? You can pool resources, expertise, and strengths.
? There are limited startup costs.
? There are few formalities ...
This answer examines the different type of business organizations - including advantages and disadvantages of each. Included in the analysis are taxation issues related to each and the steps needed for dissolution. The business organizations examined include:
LLP and LLC