Small Business Idea
Small Business Idea
The United States Government recently released funds to create a small business. Using these funds to create a small business certain decisions need to be made in order to be successful. The proprietor has to consider what type of business is best suited for the product or service and realize the advantages and disadvantages of sole proprietorship, corporation, limited liability or partnership. The proprietor must also take into consideration and understand the legal, tax, accounting and implications between the two types of business. By understanding and acquiring the information need to create the small business using the government funds, the proprietor is positioned to become successful in there idea.
The process of forming a small business is to begin by deciding what type of business organization to establish. For a small business there are two types; sole proprietorship and a partnership. Choosing the business structure that is appropriate for the new business that will have long-term impacts and it is crucial to weigh all the choices. Certain implications must be considered such as, risk of lawsuits, tax implications, level of personal liability and what level of control is desired (Kimmel, Weygandt, & Kieso, 2009). Identifying what options is available and choosing what the appropriate business organization is the initial step in creating a successful company.
Advantages and disadvantages of a small business structure
To qualify for the government small business loans one has to create a small business. Small business consists of two types of business organizations; sole proprietorship and a partnership. Within these types of business there are advantages and disadvantages.
A sole proprietorship is described as an unincorporated business that is owned by one individual (Sole Proprietorships, 2012). Advantages that are associated with a sole proprietorship are:...