Beginning of Lit1 Task 1 Essay

737 Words Feb 4th, 2013 3 Pages
Sole Proprietorship: Sole Proprietorship is a very common form of small business organization. Benefits include having complete and total control as to how the business is run, marketing, hours, as well as the immediate dissolution of the business. Disadvantages range from personal liability for the business. A sole proprietor is also held responsible for all taxes for the business as personal income.

Liability: A sole proprietor is held personally liable for any errors or damages caused by the business. The assets of the owner are at risk should the business be involved in a lawsuit.
Income Taxes: In a sole proprietorship, the business owner is responsible for all income earned through the business, and must be reported as personal
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Convenience/Burden: Sole proprietorship has both a high convenience factor coupled with moderate burden. From a convenience aspect, it is inexpensive, requires no collaboration between other parties, is operated under the strict discretion of the owner, and offers unparalleled freedom. The burden factor is there, but less so than in other business forms. The owner holds responsibility for keeping all business documents, permits, and insurance, as well as all of the liability.
General Partnership: A general partnership is simply when two or more people can be identified as entering into a business agreement for the purposes of making a profit. A general partnership is very informal, although you can have a formal partnership even though it carries no more weight. Much like a sole proprietorship, only with multiple parties; there is little distinction between the business itself and the owners.

Liability: Any partner in a general partnership is responsible for 100% of the partnerships debts and risks. Not only are they responsiblefor their portion of the debt, but are also responsible for the decisions and actions of the remaining partners.
Income Taxes: General Partnerships do not pay income taxes. Any profits (and losses) are divided amongst the partners. Partners are not employees per say, but they would claim earnings on their personal income tax filings.
Longevity/Continuity: Longevity

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