Types of Businesses in America
American society has always been optimistic towards their future. The American nation is a capitalistic country. Many individuals are influenced to start up their own businesses with their own ideas. The government helps and regulates all business. There are three types of businesses sole proprietorships, partnerships and corporations. A sole proprietorship would be my best choice to start up my own business. This form of business is the easiest to start. In the states a federal license or permit is needed to sell products or serve a service to the public. A license is required in order to begin the business operation. Income or loss the owner is accounted for on the tax return. “Flow thru taxation” is the term used to state that the owner’s incomes flows through the tax return. I would keep contact daily with my accountant. The business would not be taxed twice as there would be in corporations. It is simply taxed once. I would not need contracts stating two people joining in and making an effort to make a business work as there would be in partnerships. I would just rely on myself. I have better confidence of trusting myself than trusting others in forming a partnership. It is a gamble and a risk to be liable for the entire business. Life is pretty short and taking a risk would either mean it was worth it or you learn from it.
Since it’s the easiest form of business to start why not take full advantage. But there are advantages and disadvantages. In a sole proprietorship there is limited capital which means the owner would have trouble getting the supplies and materials needed for. But it would also seem harder to borrow money and loans from the bank. A loan from the bank seems like the ...
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...g. Businesses structures and regulations are strong and firm which help businesses around the nation. The rules and regulations from the federal government help and keep the people safe. Starting a business is easy and profitable. It may be easier to start a sole proprietorship rather than a corporation. But many can receive help from family or friend and start a partnership where there is help and support of a partner. There are advantages and disadvantages for all forms of business. There are endless opportunities for the American people. There optimistic attitudes can lead them to great wealth.
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The company that we have chosen as for our report purpose is M.M Enterprise Cash and Carry which is a retail store that provides household goods that is mainly imported from India and other countries for its customers. The store was established in the year 1989; in the past 26 years the retail store had gone through its tough times and as the years has passed the store has progressed well. According to the owner of the retail store, Mr. Mahendran mentioned that it had taken him about 10 years for the company to go through a full swing experience and effort in order the company to progress and currently the company is slowly in the midst of progress. As per our observation that is made, the company has focused on the Indian market
O'Connor, James V. "Business Edge, Volume 2, No. 21." Business Edge, Volume 2, No. 21. The Business Edge, Apr. 2000. Web. 11 Feb. 2014. .
Sole tradership is when the business is fully owned and managed by one person, though others can be employed to help run the business. As the sole traders only financial income is from the business and/or bank loan, they do not have the resources to expand and cover regional or national areas. These types of businesses are located in the small business sector and usually cover local areas. Such businesses could be hairdressers, corner shops or market stalls etc. Sole traderships have unlimited liability so if the business fails to pay its debts the financial responsibility falls on the owner/s to pay the debts in full even if they have to sell their business, personal possessions and assets.
Nickels, W. G., McHugh, J. M., & McHugh, S. M. (2010). Understanding Business (ninth Ed.). New York, NY: McGraw-Hill Irwin
The U.S. Government has many laws that are intended to keep businesses fair , balanced and competitive. The laws that are created allow businesses to expand internationally and keep the product competitive in a global market.
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. So when you own your own business, you’re the first and only one that receives all earnings and profit. So if a person has a successful firm, he/she is the first to reap the success and rewards. 2) Another advantage of owning your own business is that you’re your own boss. You can set your own hours, decide what you want to do with the company, no manager to answer to. Basically, you’re in charge of everything. The owner solely makes all decisions. Or in other words, you’re running the show. 3) An additional advantage is that a sole proprietorship can be easily organized. It’s easy to start your own business. First of all, it costs very little money to start your own business. As a sole proprietor, you have minimal legal requirements. The owner doesn’t have to establish a separate legal entity. All that is needed is to register the company with the state and apply for an occupational license and any additional licenses required for the state. ...
The main advantages of becoming a sole trader are that the owner has independence and can run the business however he likes without having to involve others in the decision making process. Another advantage of becoming a sole trader is that you are allowed to have an overview of the whole business rather than looking over a certain part if in a partnership or a company. The disadvantages of becoming a sole trader are that the owner will have an unlimited liability of for the debts of the business so this means that if the owner was to go into bankruptcy then the owner is liable which means that the debts he was owing to the creditors might be paid off by the sale of the owners’ personal assets within the business and assets outside the business so they are putting everything at risk. Decision making is another disadvantage because all the decisions are made by the owner because there are no partners in which to make decisions with so all responsibility relies on the sole trader so the owner is liable for anything which goes wrong.
"What are the barrier to entry, inhibitors to growth, and detriments to the health of small business and entrepreneurship today?"
A sole proprietorship is a business owned and controlled by a single individual. There are more sole proprietorships than any other type of business available (Lau, 2011). It is a simple type of business to set up, as well as simple to terminate. The proprietor has the freedom to determine operating hours, what services or goods to provide, where it operates, and what contracts to enter into without needed to consult another party. With full control, however, comes full liability. A proprietor is personally liable for all financial obligations whether they be debts from company operations or restitution ordered to be paid from third party suits. It can also be difficult to secure financing for a sole proprietorship as banks look at the business as an individual. Often, banks will treat loans to proprietorships as personal loans to the proprietor and require collateral.
A small business can be defined as a legal entity consisting of very few employees. Establishing a business such as a proprietorship is the least complicated among business structures. Proprietorships also have a major advantage over other business structures with regards to filing taxes. Profits generated by the business are taxed at individual tax rates thus avoiding the double taxation incurred by corporations. Local economies, government offices, schools and the unemployed benefit greatly from the growth stimulated by these companies. The taxes collected from small businesses and job creation makes small business a vital part of the community.