Sole proprietorship, is referred to as owning your own business entity and more or similar, sole proprietor and business owner are same. There is no legal distinction between the two; the business legal name is the same as the owners. However the business owner may obtain and conduct business under a fictitious name by filing a DBA also known as ‘doing business as’.
The merits associated with sole proprietorship are:
• Liability: The sole proprietorship while offering own complete autonomy, it also burdens the responsible person with unlimited accountability. The lack of distinction between the business and the owner leaves a little room for financial and or legal ...view middle of the document...
• Location: The sole proprietor has discretion to decide when and where he or she will conduct business.
• Convenience or burden: The sole proprietorship is a simplest businesses set up. In most cases, it is simply a matter of filing required forms. The Sole Proprietor may operate under a different name only to file a ‘doing business as’ (DBA) form at appropriate locations. Te business owner, himself is responsible for company affairs and must ultimately bear the burden of all company obligations.
Whereas, General partnership generates by black and white, meaning; that there is written or verbal contract among individuals, In written, as we see according to the agreement which indicates the bases in which the associates or partners settle to operate while verbal or oral contracts are legally binding and may be upheld in court a common sense business practice is to put everything into writing. Partnership agreements usually contain the names of partner’s name, type of business and partnership, capital and status of the organization and any resource investment from each partner. The agreement should also include instructions for dissolving and or ending the partnership.
The merits associated with general partnership are:
• Liability – There lies unlimited personal responsibility for the owner and the key planning topic is to discuss about firm’s obligations issues. If some circumstances arises such as your organizations gets in debt for any of the reason including disability or death of a partner, thus each partner is individually accountable for all of the firm’s debts.
• Income Taxes – The partnership is not focused to Federal income tax. Information must be followed from 1065, which reports about secure income in partnership type of business. Others include business deductions and net taxable income. However, he general partnerships are based on entity and do not focuses on separate tax entity, and so therefore, there is no partnership that compels Federal income taxes. A copy must be presented as of schedule K, form 1065. In addition, in this type of partnership, if one partner faces returned taxes then other partners can take care of the matter and cooperate and even can take advantage over next profit of personal income.
• Longevity/Continuity –As with the sole proprietorship, a general partnership only last as long as the partners have our live ownership and cannot be transferred to death. A partnership cannot be passed from one person to another via a will.
• Control – in a general partnership, all partners have decision-making rights and all partners obligate it to abide by anything one of the individual partners chooses to sign on.
• Profit Retention -Partners in a General Partnership share company’s profits in comparison to their interest of partnership.
• Location – General partnerships are much like a sole proprietorship, that is, they can operate at any location agreed one by the partners. However once established,...