Business Advantages And Disadvantages

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Recommended: The major disadvantage of a sole proprietorship is

Sole proprietorship:
Sole proprietorship is one the most simplistic forms of business and also the most common. It is owned by one person and is usually run and managed by the owner. They are usually a smaller company with minimal employees. There are several advantages to this type of business. It is very simple business to start and terminate. The owner has free will to operate and change the company at any time without permission from other people. The sole owner has all rights to any proceeds and the owner is only taxed once on their personal taxes. Some of the disadvantages are the owner having limited resources, the owner is personally responsible for the debts of the company and the business dies with the owner.
• Liability:
The …show more content…

Reporting to all levels of the corporation can be a monthly obligation as well as reporting to government entity’s for taxes and other required information.
Limited liability Company:
A limited liability company or LLC combines some attributes from partnerships, C-corporations and S-corporations. Some advantages are that an LLC has are tax benefits and the members (owners) are not personally responsible for the debts. One disadvantage is that if a member dies or retires then the company is held to the State laws on how the company will move forward.
• Liability:
A members liability is only extended to the amount of their contribution to business. They are not personally responsible for the company.
• Income taxes:
The individual member pays taxes on their share of the LLC income.
• Longevity or continuity of the organization:
If a member dies or retires an LLC can be lead to dissolution. According to state law some states may allow the LLC to continue if the other members agree on it.

• Control:
Members jointly run the company.
• Profit retention:
Members share the profit

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