Small Business Idea

In: Business and Management

Submitted By aristotlet
Words 1147
Pages 5
Small-Business Idea Paper
University of Phoenix
ACC 561

Small-Business Idea Paper There are numerous factors affecting the type of business organizations that an owner should form, so that it is most beneficial for him and the product or services provided. In this paper, the four business structures are evaluated and the association of the legal, tax and accounting implications with the different structures are also discussed. Suppose that the government has released funds to set up small businesses, I would set up a language services company. The services will include translation, transcription, interpretation, copywriting and proofreading. Most companies nowadays provide services internationally. It is, therefore, important to be able to understand each other, not only in English but also in the local language. The different forms of business organizations are evaluated first before deciding which form best suits the services provided. Sole proprietorship is the simplest business form and refers to a single person operating the business on his own. The advantages include the ease of establishment (most sole proprietorships can be started with a low initial capital), full owner control and tax advantages (Kimmel, Weygandt & Kieso, 2009). Legally, the sole proprietor is fully liable for everything in the business and if the business fails, he is fully responsible to clear all debts. In most cases, sole proprietors have favorable tax advantages because they just pay taxes over the business profits and if the business is operated from home, the costs may be deducted from income taxes. Because of the simplicity of this business structure and that the taxes are not paid from the business but by the owner, there is no requirement for extensive financial statements to be created (Tiwary, 2008). Since a sole proprietorship is not a publicly traded company, it…...

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