U.S. Judicial System Assessment
Timery Toupin
Baker College
U.S. Judicial System Assessment There are several options available today when forming a business depending on the size of the business and number or owners involved in it. Each has advantages and disadvantages which I will discuss briefly here. The sole proprietorship is the least complex and cheapest form of doing business. It is a company with one owner and it is not registered with the state. Starting a sole proprietorship requires no formal paperwork or license, all you do is create it and go into business. The tax advantage of them is that any profit earned is treated as your personal income, and not treated separately by the IRS. Thus, you do not need separate or special taxes prepared each year for the business. These are the advantages of sole proprietorships. The largest and most daunting disadvantage is that any debts or legal judgements against your business are your personal responsibility. Your personal assets are fair game if you are ever sued or run into financial issues while doing business. Corporations are another form of business with several pros and cons to it. A corporation biggest pro is that it protects its owners from legal liability. Once the business is incorporated, the law sees it as a separate entity, and the owner’s legal liability for the business’s debts and activities becomes limited. Corporations are also able to issue stock, so it is a strong selling point for investors. They also have a large management structure typically, with directors, officers, and shareholders. This is an important point if the business is a large global company. Not a small side business that someone is running as a secondary income. Some of the downsides of corporations are in the time and cost of forming them. The actual incorporation process can be costly and time