The Structure of Your Home Based Business: If You Build It...
Starting your home based business can be an exciting venture,
and deciding on the structure of your home based business is the
first step toward your independence. Knowing which business
structure is best is important to the future of your home based
business, so you may want to consult with a professional before
making your final decision about the structure of your home
based business. However, you need to know a little information
before you begin discussing the structure of your home based
business with anyone.
The first structure of your home based business that you can
consider is a Sole Proprietorship. This structure for your home
based business is the simplest and most inexpensive way to
structure your home based business. Since you have complete
control over all decisions and operations, this way to structure
your home based business gives you all income of the business to
use as you see fit. Many of the profits from this structure of
your home based business go directly toward your tax return, and
the business is fairly easy to dissolve if necessary.
The downfall of a sole proprietorship is that you will be
legally responsible for all debts of the business, so your
business and personal assets are at risk when the structure of
your home based business is a sole proprietorship. It is also
more difficult to raise capital on your own, which you will have
to do with this structure of your hone based business. Plus,
with this structure of your home based business, employee
benefits are not directly deductible from business income.
The second structure of your home based business to consider is
a Partnership. In this structure of your home based business,
you and at least one other person share ownership of the
business. In this structure of your home based business,
partnerships are easily established, but you need to make sure
you have a Partnership Agreement drawn up. Also, by having more
than one owner in this structure of your home based business,
you can raise more capital. Some difficulties with this
structure of your home based business is making sure you have a
partnership with a person with complementary skills and a
willing to compromise. Also, in this structure of your home
based business, profits have to be shared and partners are
liable for the actions of the other partners.
Read the rest of the article here: The Structure of Your Home Based
Business.
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