More handpicked essays just for you.
Law in business operation
What is sole proprietorship? what are the major advantages and disadvantages of this form of business ownership
Law in business operation
Don’t take our word for it - see why 10 million students trust us with their essay needs.
Recommended: Law in business operation
Starting a business can seem like a daunting task, when really there is a systematic approach that an entrepreneur can take to setting up a business. There are many factors to consider when setting up a business structure; these factors include start up cost, operating costs, liability, and taxation. A business owner will also want to look at whether or not they may want to expand in the future, which will also play a factor in what type of business they should set up. This paper will look at the advantages and disadvantages of sole-proprietorships, partnerships, limited liability companies, and corporations. As well as look at what courts can do if a business operates outside the scope of accepted business practice. There is no “one size fits all” company structure, which is why a potential business owner needs to look at and evaluate all the different options before choosing a type of business to set up. The first step to setting up a business is to pick a business structure. Sole-Proprietorships are the oldest and most common form of business making up about 72% of the businesses in the United States.(Ref. 3, pg.76) It is a simple form of business to set up; all you need is a product or service to offer, any applicable licenses or permits, and a business name. Although sole-proprietorships are the most common form of business, they only account for about 5% of the total profit in the US. The advantages to a sole-proprietorship are that they are easy to set up and cheap to operate. There are no filing fees with a state or national government, and the book keeping requirements are very relaxed. The disadvantages to a sole-proprietorship are the constraints on generating operating revenue, unlimited liability, and taxation me... ... middle of paper ... ...or their business. Works Cited 1. Larson, Aaron, “The Sole-Proprietorship,” expert-law.com [online], August 2004, http://www.expertlaw.com/library/business/sole_proprietorship.html, [retrieved 20 February 2010] 2. Unknown, “Corporations vs. LLC’s,” findlaw.com [online], http://smallbusiness.findlaw.com/business-structures/llc/corporations-compare-llc.html, [retrieved 05 March 2010] 3. Brue, Stanley L., Flynn, Sean M., McConnell, Campbell R., “Macroeconomics: Principles, Problems, and Policies,” McGraw-Hill International Edition, 18th edition, New York, New York, 2009, pg. 73-88. 4. Jentz, Gaylord A., Miller, Roger L., “Business Law Today,” South-Western Cengage Learning, 8th edition, Masan, Ohio, 2008, pg.705-824. 5. US Government, “2009 Individual and Corporate Tax Rate Schedules,” irs.gov [online], http://www.irs.gov/, [retrieved 03 Mar 2010]