As a sole proprietorship there Is one owner, this owner makes the decisions, receives the profits, pays the taxes as the owner, not at a business level and can sell the business. The advantage Is that this Is the most Inexpensive way start a business, obtain a license and the owner has all the decision making ablest. The disadvantage Is that the owner Is personally liable for all aspects of the business, The owner assumes all responsibility for contracts, paying taxes, profits, losses and can sell the business at will. Partnership
The general partnership involves two or more owners sharing the responsibilities of the company and are “personally liable for the debts and obligations of the partnership” (Chessman, 2010, p. 6). Because of the partnership, the advantage is that owners do not have to pay federal income taxes, but the disadvantage is that the owners must record the income, profits, and losses on their personal income taxes. The advantage of the limited partnership is that it limits the personal liability of each partnership which protect their initial investment.
The disadvantages are that the partners in a limited partnership are usually Just investors and they have little to say about the company day-to-day operations. General Corporations Corporations are the most prevalent form of doing business in the united States. Corporations range in size and owners can be one sole owner to thousands of shareholders. The advantages are the personal assets are protected but the disadvantages are that the business is owned by the stockholders and the decisions must be made with this in mind. Chapter S
The advantage of an Chapter S is that they do not pay federal income tax, business expense tax credits, and limit the number of shareholders. S corporations allow small business owners liability protection, while also preventing a second taxation of earnings. The disadvantage Is that usually S corporations are small and privately held such as a small family business and that can be difficult to manage. Limited Liability Company As one of the most popular types of companies to set up, the Limited Allowably Company limits the personal allowably of the owners.
The stakeholders decide If the company or the partners are taxed and they run the business how they see fit. The All’s are easy to start and offer some protection yet the disadvantage Is that this Is not a corporation and there are not many restrictions, which could lead to an unstructured type of company. In the business world, whether owning, running. Require knowledge about their structure. Each type of company involves a different set of tax implications and liabilities. A clear understanding of the differences will lead to maximizing profits while abiding by the laws of the state.