Creating a Business Idea and Types of Business Organizations

Topics: Balance sheet, Business law, Statement of retained earnings Pages: 4 (1541 words) Published: April 26, 2012
Small-Business Idea
Recently the United States government has released funds for creating small businesses. An opportunity to acquire government funding for a business venture is one to take advantage of and to put dreams into reality. The intent of this paper is to outline the three main forms of business organizations including the tax and legal implications as well as the accounting requirements for each structure. In addition, this paper proposes creating a small business of a women’s only gym while weighing in the advantages and disadvantages of the three types of business organizations which are sole proprietorship, partnership, and corporation. To start the process of forming a business there are three main forms of business organizations that a potential small business owner must choose from. Three of the main business organizations used in the market place today includes sole proprietorship, partnership, and corporation. Deciding on a business structure appropriate for a new business will have long-term impacts and it is crucial to weigh all the choices. The following must be considered: the desired level of control, tax implications, risk of lawsuits, and the level of personal liability (Kimmel, Weygandt, & Kieso, 2009). Reviewing available options and selecting an appropriate form of business organization is the first step to creating a successful company. Before determining the preferred type of organization for the women’s gym, here is an outline of the key attributes of each form. A sole proprietorship is a business owned by one person (Kimmel, Weygandt, & Kieso, 2009). An advantage of sole proprietorship is it is simple to establish and gives the owner control over the business (Kimmel, Weygandt, & Kieso, 2009). This is always a great advantage for someone who wants to open a business because it gives them leeway to run their business however they choose. In addition to advantages, a sole proprietorship does have its disadvantages. A sole...
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