Satisfactory Essays
Sole Proprietorship: Sole Proprietorship when there is no legal difference between the person who owns it and the business (Terence Lau, 2013).
• Liability: The operator/proprietor of a Sole Proprietorship is subject to the full and indefinite financial liability for his/her business. Both the owner and the company is one in the same legally. The company’s assets are legally the same as the proprietor’s private assets.
• Income Taxes: The proprietor of this Sole Proprietorship is responsible for paying taxes in the same way we pay taxes as personal income.
• Longevity or Continuity of the organization: The business ceases to exist when the proprietor no longer exists. This type of business cannot be passed down to any heirs.
• Control: Business partners are not allowed with a Sole Proprietorship and they have full sovereignty in all respects of business decisions.
• Profit Retention: In Sole Proprietorships, there are no investors or partners to share any profits with. All profits belong to the proprietor.
• Location (Expansion): The state does not require Sole Proprietorships to register with them. The business must be legal within the state guidelines, and then the proprietor can run his/her business where they see fit.
• Convenience or Burden (Compliance): There are no requirements placed upon Sole Proprietorships in regards to financial reporting, or regulatory requirements. They can elect for DBA (Doing Business As) company, as clients, and mainly banks, may feel the company is more legit if it has unalike names as the proprietor.
General Partnership: General Partnership is the business method in which there is more than one person agreeing to share all proceeds and losses of the business.
• Liability: All general ...

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...y of the company.
• Control: No single member of the company controls the company whether the members control it.
• Profit Retention: When passed through to the members, profits are in proportion to their investment within the company. They are then taxed as regular income.
• Location (Expansion): LLC’s must be formed in compliance with individual state laws in which the company does business.

• Convenience or Burden (Compliance): They have extra requirements put upon them in order to comply with the state regulatory requirements. They are subject to ongoing requirements for the annual reports, franchise taxes, and the related fees with reports. There are no limits on how many members the company can obtain or their residence of members. The members have limited liability on their investment, and could even elect to change their company into a C-Corporation.
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