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ACC 557 Week 2 Paper Four Types of Business - Running Head...

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Running Head Four Types of BusinessUniversity of PhoenixACC/561IntroductionAn Entrepreneur is a person who forms and operates a business. Entrepreneursform and start companies by themselves, or with partners. Most of the timecompanies which are started by entrepreneurs are relatively small in size, but somegrow into huge corporations, such as Microsoft which is owned by Bill Gates.Entrepreneurs have four different options when starting a business, which include asole proprietorship, Partnership, limited liability company, and also a corporation.Each form has its advantages and also disadvantages depending on what the typeof business is, and also what service it provides.Sole ProprietorshipSole Proprietorships are the simplest form of a business and the most common inthe USA. The sole proprietor is the one who does the work, basically they are thebusiness. Just like any other form of business, these companies have advantagesand also disadvantages. Some advantages include the fact that sole proprietorshipsdo not cost a lot to start up, and also the owner has complete control to make anymanagerial decision he or she wants without having to consult with anyone. Otheradvantages of sole proprietorships is that the owner gains and receives all of thecompany’s profits without having to share with anyone, and this type of business canbe sold or transferred whenever the owner decides to retire, also not having toconsult with a partner. Disadvantages of a sole proprietorship include that theowners usually provide all of the capital for the company using their own personalfunds, and also they are responsible personally for any debt that the businessobtains. As far as taxes are concerned, the profit or loss from your sole
proprietorship business is reported annually with your personal income using the IRSSchedule C form with your 1040 tax return. Businesses with less than $5,000 inexpenses may be able to use the simpler Schedule C-EZ form.

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Term
Spring
Professor
Mcfeds
Tags
Accounting, Business, Corporation, Types of companies, Limited Liability Company

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