What Do You Think Is The Best Form Of Ownership/business Organization
The business is easy to dissolve if desired. For many small businesses the best initial choice is either a sole proprietorship or if more than one owner is involved a partnership.
A sole proprietor need only register his or her name and secure local licenses and the sole proprietor is ready for business.
What do you think is the best form of ownership/business organization. In most instances you will probably have to choose between a limited liability company LLC a partnership a corporation or a sole proprietorship. In fact the sole proprietorship is the most common form of business organization in our economy. Owners have limited liability greater credibility for obtaining financing and no double taxation as all profits pass directly to the owners and the corporation pays no taxes.
A limited liability company LLC is a way to organize a business that limits the liability for the owners who are called the members. These firms are owned by one person usually the individual who has day-to-day responsibility for running the business. Its flexible and scalable as you are taxed more like an individual person than a corporation but it can shield you from the personal liability associated with a sole proprietorship.
It is important that the business owner seriously considers the different forms of business organizationtypes such as sole proprietorship partnership and corporation. Which organizational form is most appropriate can be influenced by tax issues legal issues financial concerns and personal concerns. The sole proprietorship is one of the popular forms of a business organization due to its simplicity ease of setup and nominal cost.
Sole proprietors are in complete control and within the parameters of the law may make decisions as they see fit. Easiest and least expensive form of ownership to organize. There are however restrictions on the number and type of shareholders.
S Corporation A form of ownership that is the best of both partnerships and corporations. Sole proprietors own all the assets of the business and the profits generated by it. There are some criteria that you can use to find the business structure that works the best for your purpose.
From an accounting viewpoint a sole proprietorship is regarded as a business entity separate from the other financial activities of its owner. From a legal viewpoint however the business and its owner are not regarded as separate entities. Most new businesses start out as sole proprietorships.
Profits from the business flow-through directly to the owners personal tax return. For the purpose of this overview basic information is presented to establish a general impression of the business organization. This is the simplest form of ownership for a sole owner and requires little more than a tax.
The vast majority of small businesses start out as sole proprietorships.
Reading Sole Proprietorship And Partnerships Introduction To Business
Reading Sole Proprietorship And Partnerships Introduction To Business
