There are three types of business Sole Proprietorship, Corporation, and Partnership. They all have their advantages and disadvantages with each one. Sole Proprietorship is a small business which is ran and operated by the owner. They are eye-catching to small investors because they are relatively easy to start up. The owner receives all the profit that is made from the business. Some advantages of starting a small business is that it’s very easy to start up. They don’t have to go through the things that the bigger cooperation have to go through such as double taxation. The business can be named after the owner. The owner of a sole proprietorship is not required to file a separate business tax report. As an alternative, they will list business information and figures within their individual tax return. This can save extra costs on bookkeeping and tax filing. The business will be taxed at the rates realistic to personal income, not corporate tax rates. Also all the businesses decisions are made by the owner. They can hire anybody, which creates extra jobs opening that is very beneficial to the economy. The disadvantages of a proprietorships is that the owner is liable for debts or violations that come with the business. The business does not continue if the owner becomes deceased or disabled.
Corporations are another form of a business. The advantages of corporations is they have limited liability with it having many owners. As a business owner, you are responsible for paying taxes only on the money the corporation pays you in the form of a salary or commission this is on your personal tax return. The corporation is accountable for paying corporate taxes on any revenue the company makes. Another advantage is that the business will continue to run if something were to happen to the owner. It is easier to sell or merge a corporation because it is a matter of changing