Planning Various Business Types
Author: Dock Murphy

The planning stages of a business tend to be a bit hectic if
for no other reason than they are where you really are given the
chance to develop the plan for your business that you will refer
to thousands of times over the course of the life of your
business.   One of the numerous things that you need to decide
during this time (or at the very least give some thought to) is
what type of business you are going to run.   This has nothing
to do with the actual business niche itself, but rather the
actual legal type of business that you are going to be involved
in.  There are a number of different business types in the legal
sense and while those types vary from country to country, there
are general consistencies along a few major distinctions.

The first of those distinctions is the business type known as a
sole proprietorship.  This is the most common business type
simply because it is the easiest one to start with.   A sole
proprietorship consists of the business being wholly owned by
one person and therefore being associated with that one person.
The business expenses and liabilities are assumed by that one
person, but at the same time that one person has total control
over everything that the business does.   Sole proprietorships
are free to start in terms of legal registration and do not
require a separate tax return in most cases as the income from a
sole proprietorship is usually just reported as self employment
income.

Taking the next step up from a sole proprietorship, we come to
the concept of a partnership.  There are a number of
similarities between the two business types and the most obvious
ones to point out are that partnerships are cheap and easy to
run in the legal sense because all of the partners can usually
just report their share as self-employment income rather than
requiring another tax return for the business.   The partners
also share responsibility for the business by default in a legal
sense unless there is an agreement that specifically assigns
responsibility to one partner.

Up from a partner is a private corporation.  This is a business
that is a separate entity from the people that run it; all of
the liabilities are the businesses and for the most part the
people running the business can not be held responsible for
those liabilities.   However, the maintenance of a corporation
requires regular fees to be paid as well as up front
registration fees and regular records of the business affairs
must be kept along with regular board meetings.   Also, a
separate tax return for the business is required because it is a
separate entity.


About The Author: Dock J. Murphy is owner of Plug in Profit
http://Site.com and writes on a variety on a variety of
subjects. To learn more about this topic Dock J. recommends you
visit: Http://www.pluginprofitsite.com/main-17106