All profits and income pass directly through the business owner to the individual. Just as it will be taxed as personal income, all profits are considered personal gain. Profits do not need to be shared with anyone. -Location (Expansion): To move the business into a dif... ... middle of paper ... ...h state may have different laws concerning this matter. -Control: The owner, or person that started the LLC, generally has the control, unless otherwise specified to be jointly managed.
SOLE PROPRIETOR DESCRIPTION most all new business start as sole proprietorships because of the simplicity to them. the only legal hurdle to starting a sole proprietorship is applying for the local permits and licenses that apply to the area of business. This is a very simple business organization to quit as well. When the owner wants to stop doing business they can simply stop taking new business. The owner has the ability to grow or contact its operation at will with no need to consult with a boss or board of directors most sole proprietorships operate on a small scale, the main factor that distinguishes a sole proprietorship is the sole responsibility of ownership and decisions.
Economist 390.8619 (2009), 63-64. Web. Klier, Thomas H. "From Tail Fins to Hybrids: How Detroit Lost its Dominance of the U.S. Auto Market." Economic Perspectives 33.2 (2009), 2-17. Web.
Owning Your Own Business 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. Five advantages for owning your own business are: 1) The owner receives all profits, meaning that all earnings go to the sole proprietor, or the owner, and isn’t shared with anyone else. The profit is not split among partners, or split among a corporation.
Perfect competitive and monopoly are the extreme of market structures. Therefore, the supply and price decision are totally difference between perfect competitive and monopoly. As, perfect competitive, where there are many firm competing, none of which is large and freedom to entry and all firm products are homogenous products. Slomans, Wride and Garatt (2012) states firms are price takers. There are so many firms in the industry that each one producers an insignificantly small portion of total industry supply , and therefore has no power whatsoever to affect the price of the product since if firms rise the price, customers can choose another firm to consume which are lots of firm in market.
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.
Detroit becomes largest u.s. city to enter bankruptcy. USA Today. Retrieved from http://www.usatoday.com/story/news/nation/2013/12/03/detroit-bankruptcy-eligibility/3849833/ Gui Su, Q. (n.d.). The mandarin meaning of yin yang.
Another condition is the free entry and exit of the market where the firms can come and go at will with a lack of barriers to say otherwise. As far as demand, each firm will see their demand as perfectly elastic. This will create a horizontal line at the price on the demand curve, not for the industry but only as it pertains to individual firms because they take the market price with no yield to the quantity that they produce. To
Economic systems have many variations with one of them being the free market economy. In the free market, there is no government intervention so firms can operate without having to comply with regulations or pay tax (they would have to pay an extremely minimal amount of tax for defense ex.). This in theory is a breeding ground for competition but in reality economies very close to free markets face the challenge of monopolies. Monopolies control the whole market and set the price they want and don’t take the price like other companies. They have complete control over the market so they can have supernormal profits by raising the price over the market equilibrium if it is easier and more profitable for them.