Running Head: ENTITY BUSINESS PLAN Ã¯Â¿Â½ PAGE Ã¯Â¿Â½1Ã¯Â¿Â½
Many decisions need to be made when considering a new business venture. The success rate of a new business surviving at least two years is approximately two-thirds; therefore, careful consideration needs to be taken when making these decisions in order to succeed. Before starting a business, an individual needs to become acquainted with the different types of business organizations in order to decide which type it should operate as. Differentiating between the strengths and weaknesses of the business organizations and the legal issues that impact the structures will aid in determining what type is best suited for the business venture. After reviewing the different factors involved, an initial business plan for Designer Flooring, a high-end flooring contractor will be developed.
There are various types of business organizations that exist: general partnership, sole proprietorship, limited partnership, (LLC) limited liability Company, corporation, an S-corporation, or a franchise.
Choosing the type that is best suited for the business venture and business owner involves differentiating between the strengths and weaknesses of the business organizations.
Sole proprietorship is less prone to malfunction in the process of a business organization to create. The business is owned by one person and formed by obtaining a city license; no federal or state government approval is required. A sole proprietorship remains in existence until the business is dissolved or the owner dies.
One of the strengths of sole proprietorship is that the owner makes all decisions regarding the business including when and who to sell the business to, if so desired. An owner receives all the business profits. One of the weaknesses of sole proprietorship is that the sole proprietor has unlimited liability and the capital is limited to Personal funds and loans. The sole proprietorship is not a taxable entity...