Introduction:
Sole Proprietorship, Partnership, Franchise, Corporation, Limited Liability Company, are all examples of business formats available today. We will review each type of business and their function or purpose. We will take a look at the positives and drawbacks of each, and evaluate them to gain a better understanding of each.
Sole Proprietorship:
Sole Proprietorships make up the majority of small businesses in America today. They are easily started and typically do not require a large initial investment. Sole Proprietorships are businesses like the little mom and pop sandwich shop around the corner. They are started out by a single owner and are not separated financially from their owners. They may have separate banking information from the owner but taxation requires that the business and owner are one. The single most distinguishing feature of Sole Proprietorships is the unshared, unlimited liability and responsibility of the owner.
There are several advantages to a Sole Proprietorship. First is the simplicity of it. Typically there are very few restriction s and they require minimal licensing. They offer independence, and the ability to ‘be your own Boss.’ Of course there is the fact that as the owner all the profits belong to you. Taxes are combined so there is no separate filing and there are tax advantages to filing as a business rather than an individual. That brings us to the disadvantages of Sole Proprietorships.
Some disadvantages to being a sole proprietor is often resources are limited. Because there aren’t any real differentiating factors between the business and its owner often credit is based on the owner of the business. Verifying income is difficult for banks to discern so obtainin...
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...are easily transferred from one business form to another. If the plans are for rapid growth and possible transition of business forms an LLC is Ideal.
Conclusion:
Given the various forms of business to choose from it should be easy to find one that meets the needs of your small business. The key is having a plan for your business and its direction in order to determine the best format for new your business. If it is independence you want your business to provide then a sole proprietorship is ideal. If independence is desired but assets are limited perhaps a partnership is a better fit. If it is assistance and stability desired to help get things started then perhaps a franchise is best. Should you have the assets but don’t want the liability then maybe a corporation is a better fit. Whatever your circumstances there is a format to suit your business needs.
One of the challenges to start up a new business is choosing the kind of business to start.
Easy and inexpensive to form: Sole proprietorship is the simplest and least expensive business structure to organize. Costs are minimal, with legal costs limited to obtaining needed license or permits.
People go into business to make money. Unfortunately, not everyone considers the proper way to structure his or her business so that it can make money in an optimal way while operating within the framework of the law. Failing to select a structure for a business carefully can mean the loss of that business and of its associated assets. I will discuss various types of business entities that exist and the pros and cons of each. Specifically, I will explore
Taking on the risk to open you own business is not a smooth, easy process; although, perseverance can take you a long way. Troy Smith made several attempts at opening restaurants independently as a sole proprietor, but it was until a small root beer stand came into his possession did he find the success he was looking form. This stand called Top Hat was about to become a parking lot when Smith realized it’s value and put his focus into making it successful, while watching this success grow Charles Pappe became interested and Pappe and Smith formed a limited partnership; whereas Smith was the general partener that made the business decisions and Pappe was the limited partner that invested money ad concentrated on sales. This differs from a
There are over 28 million small locally owned businesses in the United States and 70 % of these businesses are owned and operated by a single person. Owning a small business is not an easy task it takes hard work and dedication, Steve Jobs once said “you need a lot of passion for what you’re doing because it’s so hard”, people don’t realize
A sole proprietorship is a type of business that is owned and operated by one person who is responsible for all the debts. Forming the business is really easy to start off with. Also the owner receives all the profit from the business and is his or her own boss. The down side to owning a sole proprietor business of your own is it is really hard to find sources for funding the business for it to grow and expand. An example of a local proprietor business is Martha’s Kitchen. Martha’s kitchen is a really small restaurant on the outskirts of town. Martha chose to open a diner at her location because it is joined with a gas station and it is in a remarkable location for a restaurant business. Martha’s kitchen is open from 5:30 a.m. to 11:00 p.m. She serves the best peach cobbler around.
Sole Trader – This is a form of organization which is controlled by an individual. Sole trader form of business environment can extend up to family members depending upon size, personal control and other business needs. Sole proprietorship is flexible, easy to organize and manage. The biggest challenge for sole proprietorship is unlimited liability and risk of losing assets.
A proprietorship is also known as sole-proprietorship is a business which is owned by a single individual. Although the proprietorship is easy to get into, in most of the state, even the smallest business in HCO needs to be registered and licensed by the state. This form of organization is easy to form with limited resources and is subject to few governmental regulations
A sole trader is a one man business. There is just one manager. Although they are the sole manager and owner they can employ staff to work for them. They can employ as many as they want to work for them. A sole trader is self employed, this means they work for themselves, they employed themselves, they for nobody. Sole traders trade with others. They may trade expertise, an example of this would be a business consultant taking on a big job and needing an extra hand just for that job, so this person may employ a person with the expertise he/she needs. Because a sole trader is the sole owner he/she keeps all the profits, unless he/she has any employees. The owner of the business makes all the decisions, he/she will not have anyone telling them what to do. When one wants to set up a sole trader business it is relatively easy. There is little paper work involved bec...
A sole proprietor is the most inexpensive and one of the easier forms of business, and an individual can create. This process only take coming up with a business venture, getting a license from the state country of city you are going to be advertising and the business and setting of your hours of operation (Strauss, 2012).
"Advantages and Disadvantages of Sole Proprietorships ." New York Times 5 June 2007: Web. 6 Dec. 2013. .
There are many different types of business structures, but if you own and operate a business that it is a sole
There are many advantages and disadvantages when owning your own business. When you own you own business, it’s known as a sole proprietorship. But with any type of business, there will always be advantages and disadvantages.
Making the decision to open your own business is a major life event. Starting a new venture can be exciting as well as rewarding. The first step to becoming a business owner is choosing the type of business you would like to run. This business can be something that you have wanted to start up yourself or you can go with an established franchise. Are you willing to share the profits in exchange for the relative safety of a franchise or would you prefer the risk and rewards of pursuing your own vision? Franchising is a continuing relationship wherein a franchisor provides a licensed privilege to the franchisee to do business and offer assistance in organizing, training, merchandising, marketing and managing in return for a monetary consideration
Small businesses have been considered the mainstay in countries around the world. In many European countries for example, the small business has been considered crucial to the success and flourishment of the country in general. Most individuals start upon a small business venture in the hopes of realizing ownership, independent profits and personal success. Small businesses can prove extremely successful when planned properly. Studies suggest that several small businesses, however, close or fail within the first few years of operation. This failure suggests that a majority of small business owners may not have as yet realized the crucial success factors necessary for successful implementation of a small business.