Essay on Advantages Of A Sole Proprietorships And Partnerships

1380 Words Nov 16th, 2015 null Page
Every new business venture has to choose what kind of business entity is necessary for that business to grow and prosper. Determining that business entity is also based on whether or not there are other investors or family members involved in the business. During the initial research the sole proprietorship was introduced as a first method of establishing a new business, but more research is proving that a partnership or LLC can be just as advantageous.
Sole Proprietorship and Partnership Advantages When you think of sole proprietorships or partenrships you think of a mom and pop operation working the family business. There are several reasons why sole proprietorships or partnerships are used for this kind of business operation. Here are a few examples of advantages of a sole proprietorships and partnerships: Sole proprietorships and partnerships are the simplest and quickest ways to structure a new business. With these structures, you avoid the registration fees of creating a corporation or an LLC. The legal fees for starting a sole proprietorship or partnership tend to be lower too because of simplicity of these business structures. This allows a new business to open quickly and with lower startup costs over other business entities. Sole proprietorships and partnerships are pass-through tax entities. All profits and losses from the business pass directly to the business owner or owners. As a result, you do not need to file a separate tax return for your business if…

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