Lit1 Task 310.1.2-01-06
Western Governors University
Part A (The report)
Determining what type of business venture to either start or invest in can be challenging. Over the next several pages we will evaluate the various types of business organizations and at the end of this report; you should have an initial or better understanding of the different types of business forms.
Sole Proprietorship: The word proprietorship can sound intimidating. It is important to remember that most things are simplified with knowledge. If your business is a sole proprietorship then you as an individual are the owner and operator of that business. This means the sole proprietor handles everything from setting up …show more content…
This means that all partners share in the investments, risks, profits and losses of all business decisions regardless of whether that individual personally made the business decision. • Income Tax: Each person reports their profits and losses on an individual tax return; no business tax return is filed as a collective business statement. • Longevity or Continuity of the Organization: The business agreement should also specifically state the provisions to provide direction for the general partnership if one of the partners loses their life or does not want to be in the partnership. • Control: Smart general partnership owners should outline the details of the business agreement, but nothing formal is required for this type of business formation. Each person can make decisions on behalf of the business independently, meaning that one partner can speak on the behalf of other partners. Each partner does not have to be present or even be consulted on business decisions. The way business decisions and strategic develop plans are handled is something that each general partnership should determine as they develop and grow their business relationships. • Profit Retention: It is in the best interest of the partners to outline how the profits and losses are to be handled depending on the number of partners in the business. All profits and losses are shared by the partners and each person in the