Starting A Business (2 - 3)

Starting a Business - (2 - 3) When we last met, I went over some of the need for licenses and permits, as well as how to locate which one are right for you. You may already have a plan and the form of your business entity set and if you do great, if not, I'd like to share a few things with you. Form of Entity? All offer advantageous to you when you start a business, however there are disadvantageous too. - Sole proprietorships are the most simple for a business owner. A sole proprietor does not have to file a separate business tax return. A Schedule C is attached to your 1040 and filed with the IRS. Gains and losses from the business are simply combined with other personal taxable items, Disadvantages include having personal liability and lack of investment flexibility. If you need cash you need to personally have it in the bank, or you can borrow it from the bank. - Partnerships are similar to sole proprietorships, in that the formation is generally easy, however, you would be wise to use an attorney. Also the taxes are simply passed through to the individuals personal tax returns. The disadvantages are the same as being a sole proprietor, personal liability and lack of investment flexibility. - Limited Liability Corporations (LLC