Starting a business is a challenging process. It is imperative to consider what form of business would best suit the unique product or service. The decision to form a specific type of business depends on many factors including tax, accounting and legal implication as well as the structure and liability of the business. In this paper the focus will be on establishing my wedding photo studio, the advantages and disadvantages of different business structure and the consequences associated with each form of business organization.

Sole proprietorship is controlled by only one person. The owner is responsible for all debts of the business (The basic of sole proprietorship, 2005). And the income or loss will be reported on his or her personal income tax return because the assets of the business and the profits are basically the same for the owners. Owners are liable for any accounting errors on tax forms and obligate to pay any penalties that incurred (Accounting implication of a sole proprietorship). Due to the fact that sole proprietorship is a small business, it does not subject to the Sarbanes-Oxley Act. But the owner still needs to use income statement so taxes can be filed accurately. Since no legal formalities are necessary and only a few legal restrictions, this form of business is easy to establish or close down. Since it is owned and managed by a single owner, it is difficult to raise funds from major banks. The existence of a sole proprietorship business is linked to the life of the owner. The future is uncertain. Consequently, the business could be ended if the health of owner falters or unexpectedly pass away. It is more suited in a simple environment where little capital is needed, direct contact with clients is essential and the size of business demand is minimal.

Partnership is similar to sole proprietorship but with two or more owners who