Sole Proprietorship

Advantages Disadvantages
-A Sole Proprietorship is -Owner is Liable for any
Simple to set up Debts or Obligations
-The owner has 100% -If you want to include
Control over the business Another owner you need to
-Very simple to keep business Dissolve the Sole
Records Proprietorship and create a
-Fairly cheap to start up New business
-Difficulty in raising money
-Owner’s Death means the
Business’s Death
-Heavy Burden for Big
Businesses
-You must own a bank
account
 Partnerships
Advantages
-Two or more people are
Better than one
-Business is simple to establish
And start up costs are low
-There is more capital available
For business
-Greater borrowing capacity
-Good employees can be made
Business partners
-Opportunity for income splitting
-Business affairs of partners’ are private
-Limited external regulation
-Easy to switch your legal structure
If circumstances become different
Disadvantages
-Liability of the partners
For debts of the business
Is unlimited
-Each partner is liable for
The partnership’s debts
-Risk of disagreements
And friction among
Partners and management
-Each partner is an agent
Of the partnership and is
Liable for actions by other
Partners
-If partners leave or join
You will probably have to
Value all the partnership
Assets, which may be very
costly
 Corporations
Advantages Disadvantages
-Shareholders aren’t responsible -Creating a Corporation
For any debts that are incurred Takes more time and
Or judgements that are handed down Money than a different
By the corporation. Shareholders only Business
Risk their equity -Government Agencies
-May be able to raise extra money by Monitor Corporations
Selling shares within the corporation Which could result in
-Corporations may deduct the cost of Additional unwanted
Benefits to their employees and officers Paperwork
-Certain corporations may be able to elect -Corporation profits may
Treatment as an ‘S’ Corporation which will Be subject to higher
Exempt them for federal income tax on Overall taxes since the
Certain capital gains and passive income Government taxes profits
At the Corporate level
And again at the
Individual level, if profits
Are distributed to the
shareholders
 Franchises
Advantages Disadvantages
-They are a low risk investment -Initial investments into
Since you have a larger corporation The franchise can be very
To back you up Costly
-Franchises already have a large -Making an addition in
Customer base and lots of brand Your franchise is difficult,
Recognition You would need clearance
-Materials will be less expensive From corporate to make
-Allows you to be your own boss Changes
-You have little financial
Privacy with your
Franchise, since it is
Usually looked at by
corporate
I would want to open a home buy, sell, and repair business
Why?
-Because I am interested in the trades and real estate.
-I am very skilled in the trades field, and especially in wood working.
-It makes a very decent amount of money.
-It is a fairly easy job to do.

For ownership I would want it to be a Sole Proprietorship.

Why?
-Because I would like to have 100% control over my business and be free of someone
Telling me what to do or how to run my business.
-Because having a Sole Proprietorship is fairly simple to set up.
-Because it is fairly cheap to set up a Sole Proprietorship since you don’t need a big building.