In response to your email the first thing to do is to discover the type of business you are developing. This will allow the planning to proceed a business structure must be determine in order to see what tax structure the company will fall into. Discovering the business structure is critical before you can develop the business plan. Starting a business is not an easy move to make and key decisions have to be made before the correct options can be determine. First, understand what business structure exist and then a defining plan can be determined or discovered. There are three options to consider, first being Sole Proprietorship, Partnership and the last being Limited Liability Partnership. Below we will discuss some advantages and disadvantages for each. As well as make a recommendation.
In your email you stated that you are not familiar with running a business, becoming the sole owner of a business is easy and offers more flexibility in controlling your company. The advantages of this structure is as an
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Usually, Partnership is formed by partnership agreement; A contract between individuals defining partner duties, share of profit and loss for each partner and explaining what if the situation in case of any death and withdrawal of a partner from the business. The partnership is relatively simple to establish in comparison to corporations and LLC. Profit of partnership business passed through the partner's individual returns and taxed as per personal income tax. Partners are braced with unlimited liability for the debt. Conflict and disagreement among partner can delay in the critical decision with the consent of all partners is required for a business decision. The death of a partner will result in dissolve of partnership and limitation of transfer of partnership are the major disadvantage of partnership business