Part A
Sole Proprietorship: Sole Proprietorship is the easiest and least expensive way to start a business. You are in complete control of the business and are in control of all the finances. If you want to name your business anything other than your name you will need to register your fictitious business name with the State. You will register it by supplying your "Doing Business As" (DBA) name.
There are also disadvantages of being a sole proprietor, you have unlimited liability and are legally responsible for all debts in the business. You will be using your personal funds and also may have to take out a bank consumer loan to maintain your business. You also can not attract outside partners to invest in your company: * Liability – If your business incurs debts you cannot pay, you are personally responsible for payment. Also, if you have personal debts, creditors can sue your business to satisfy your debt. * Income Taxes – You must report all business income or losses on your personal income tax return. * Longevity/Continuity – When the owner dies, the business dies with them. * Control – The owner is in complete control of the business. * Profit Retention – All profits are retained by the owner. * Location – Proprietor must follow all regulations of the State in which they reside. * Convenience/Burden – Sole Proprietorship is the easiest form of business to start up.
General Partnership: General Partnerships are where two or more people enter into an agreement to start a business. This partnership can be written up in a contract or an oral agreement. Each partner is expected to work equally in the business to try and gain a profit.
The disadvantage of a general partnership is that if one of the partners enter into a contract with someone else, each partner is liable: * Liability – Each and every partner are jointly