The Right Form Of Ownership Before Starting A Business Essay examples

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As an entrepreneur, it is imperative to choose the right form of ownership before starting a business. Every business has different needs so it makes sense that each business differs in which form of ownership it chooses. I think this is important to learn and assess because of tax and liability issues. An entrepreneur starting their first business needs to take the form of ownership into high consideration because of the liabilities and expenses that are incurred depending in the form of ownership that they end up choosing. For example, if you start an online business where as the sole owner you contribute all the necessary needs of the business and part of your investment is to file as a corporation, then you might be incurring in more tax, liability and start up expenses than you should before your company starts making profit.
Choosing a form of ownership is important because it can get expensive to change it afterwards but I also think that they are important to understand and to use as your company grows. If I’m thinking of starting an online business, the less expensive way to do that would be as a sole proprietor, this way the documentation needed is minimal and my business would be taxed at my individual tax rate. In the chance that my business fails, the start up cost of ownership would have been minimal. As my business grows though, a sole proprietorship would become a liability since as the sole owner, I am the business in itself and I become liable for all…

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