Lit1

PART A

Forms of Business Organizations

Choosing a business organization to meet your personal and entrepreneurial needs is one of the most important decisions you'll make when starting a business. In this report, I will cover six different business organizations, and give you the meaning of each along with the advantages and disadvantages of each business model. After reading this report I hope to give you an advantage in the business community that will make you better suited to maneuver the ever changing needs of small business.

Sole Proprietorship:

This business model is the easiest to set up and start conducting business. All you have to do is establish a business name and obtain a Federal Identification Number. Then you can start running your business.

Some of the advantages of being a sole proprietor are:

A.) As a single owner there is only yourself to establish your business and make the decision on how you run day to day operations.

B.) All you have to do to establish this type of business is obtain a Federal Indentifcation Number and start doing business.

C.) One additional advantage would be as a sole proprietor you maintain one hundred percent of all profits and management decision.

Some of the disadvantages of being a sole proprietor are:

A.) To the simpilicty of taxation it is easier to do business in one state rather than multiple states as is with other types of business models.

B.) Taxation is simple, but is considered a disadvantage due to the fact you file your personal taxes with your business taxes. It is all considered personal income

C.) One additional liability would be you are personally responsible for all things regarding acts of your business.

General Partnership:

In a general partnership you run and start your business the same manner as a sole proprietorship, except for a couple of key differences. One being the partnership does not have to be a fifty, fifty spilt, but rather...