Acc 220 Week 1 Essay

681 Words Apr 25th, 2013 3 Pages
Explain the differences between a proprietorship, a partnership, and a corporation in 200 to 300 words. Why would an entrepreneur want to choose one over the other? If you were starting a new business, which would you choose? Explain why.
Proprietorship is also known as the sole trader. This when a type of business entity that is owned and run by one individual and in which there is no legal distinction between the owner and the business. All the profits to the owner and it has unlimited responsibility for all losses and debts. The business assets are owned by the proprietor. The debt of the business is also the proprietor responsibility. There are advantages as well as disadvantages is a proprietorship. Sole proprietorship has the least
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A corporation is a business that is organized as a separate legal entity owned by stockholders. Generally, a corporation takes the same deductions as a sole proprietorship when it comes to figuring its taxable income. Corporations conduct business, realizes net incomes and loss, pay taxes and distributes profits to shareholders. The profit is taxed to the corporation when it is earned and it is also taxed when it is distributed as dividends to the shareholders. Shareholders are not able to deduct any loss of the corporation. The advantages to a corporation is; separate liabilities which mean that the owners and shareholders cannot be sued or be held liable for the debt and never-ending business which means even if owners leave, lie or sell off the company it will still be a corporation. Some disadvantages are that it is not cheap to incorporate, there is a lot more paperwork and there are more taxes to file. It so funny that you asked if I was thinking of starting a business which one would I choose. I believe that this class is going to do a lot for me because that is a dream of mine, to start my own business. My fiancé and I are always talking about this. I would to one day have my own bar and grill. And we talked about him and me starting

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