One of the things we have to think about when we’re creating our own business is that type of business you have. The Federal Agency for the Development of Small Business (Small Business Administration) has an interesting article that explains the different types of companies and what are the advantages / disadvantages of each. Must consult with the state records office to find out how to register your business type.
The following article exposes the following types of companies:
* Owners Union (Sole Proprietor)
* Companies (Partnerships)
* Corporations
* Limited Liability Companies
Sole Proprietor
The vast majority of small businesses start with a single owner. These companies are in the hands of one person, who is usually responsible for daily operations to function. Sole proprietors own all the company’s values and profits generated by it. They also assume full responsibility for any liabilities or debts. In the eyes of the law and the public, you and your business are the same.
Advantages of being a sole proprietor
* This is the most simple and cheap to own and organize a business.
* Sole proprietors have full control, within the parameters laid down by law, and can make decisions that suit them.
* Business owners have all the revenue generated by your business, either to save or for reinvestment.
* Earnings from the business flow directly into the personal tax return of the owner.
* If so desired, it is very easy to dissolve or wind up the business.
Disadvantages as a sole proprietor
* Sole proprietors are responsible for covering all their liabilities and have the legal obligation to pay all debts incurred by your company. Threatens the values of both the company and the personal.
* Can be at a disadvantage in raising funds and often limited to using their personal savings or individual loans.
* You can have problems hiring capable or motivated by the opportunity to own part of the business.
* Some of the benefits for their employees, insurance premiums as medical expenses are not directly deductible from business income (only partially deductible as an adjustment to income).