The Options Entrepreneurs Have When Starting Up And Running Their Own Businesses

1021 Words Oct 30th, 2016 5 Pages
This paper will discuss the options entrepreneurs have when starting up and running their own businesses. There are several avenues a person could take such as, sole proprietorships, partnerships, limited liability partnerships, corporations, and limited liability companies.
Sole proprietorship is the simplest form of business; used by anyone who does business without creating an organization. The owner is the business. The owner pays personal income tax on all profits and is personally liable for all business debts (Miller, 2014). The advantages of the sole proprietorship are that eh owners can establish a sole proprietorship instantly, easily, and inexpensively. Sole proprietorships carry little, if any, ongoing formalities. Owners may feely mix business and personal assets (Spadaccini, 2009). The disadvantages is that the owner alone is responsible for all liabilities incurred by the business; if the business does not have enough assets to pay back business debts, creditors can take the personal assets of the owner. Owner’s ability to raise capital is limited to personal funds and the funds from people who are willing to give the owner loans, which can limit the size of the business. The business may come to an end at the owner’s death, it does not continue unless transferred to heirs, but when it is transferred to family or heirs a new sole proprietorship is created (Hall, 2014).
Partnerships created by agreement of the parties; not treated as an entity except for…

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