Business Organization

One should consider several factors when selecting the best form of business ownership. The type of business organization one selects can have an impact on various aspects such as taxes, liability, and exit strategy.

If I were to start a business I would choose a sole proprietorship. In sole proprietorship, the proprietor owns and runs the business and is accountable for all the transactions carried out. A sole proprietorship is the best business organization because the owner has whole regulation and decision making authority over the business. A sole proprietorship is the best business structure because one can maintain business privacy since there is no requirement to file annual reports with the state or federal government. Additionally, the owner can operate the business for any period of time and vend it or transfer at his/her discretion. In sole proprietorship, there are no explicit taxes paid by the business.Instead, the owner remits levies on income from the business as part of individual income tax payments. Moreover, there are fewer costs and legal requirements needed to form a sole proprietorship.

On the other hand, a sole proprietor can be personally held responsible for the debts and liabilities of the business because the proprietor has unrestrained liability for the debts and there is no legal discrepancy between private and business property. Since there are no additional business shareholders the capacity of the sole proprietor to raise capital is limited. There is a higher chance for the business owner to be overworked since all the decisions rest on his /her shoulders and it can be hard to take work holidays. In addition, sole proprietorship businesses have challenges in retaining high-caliber employees. Moreover, if the business owner passes away, the business may be liquidated.