An entrepreneur is someone who creates a business and essentially begins to operate it in every aspect. Taking something that once wasn’t available and finding a way to make it happen, these individuals often risk much of their personal finances in order to achieve success. There are many positive stories associated with entrepreneurs but much of the failures may not be as prevalent or advertised.
These consequential mistakes are often the building blocks of what ultimately allowed someone to be successful. While there downfalls aren’t necessarily highlighted, it is rare that someone finds amazing success on their very first idea and attempt. Also, when creating a business and establishing a market presence, the owner must determine which registered type of organization will best serve their individual needs and those of the entity created.
Following is a brief description of the many common business types utilized by self-employed entrepreneurs and the implications of taxes and legal matters associated with each.
One of the easiest forms of businesses to understand and employ, a sole proprietorship
is essentially an operation ran in the name of the owner. There is no real separation from an individual’s personal finances and income in relation to the company and no legal measurement.
For tax purposes, the individual reports income on their personal return and also bears the financial responsibility associated with any debts owed.
This is a sole proprietorship extended between two or more people and then executed appropriately. The split can be at any regulation agreed upon by those involved and the liability issues fall under one of two categories.
A general partnership spreads the liability to all involved equally but limited liability means the onus may fall on one person more than another.
The largest of business types, corporations are generally divided into two different varieties. These two, designated with an S or C, share multiple similarities and differences between an s-corporation vs. a c-corporation
depending on the goals of the company and business being offered. An election or certification shouldn’t be made without consulting a professional for their expert opinion on which offers the most rewarding circumstances for the specific opportunity.
Fortunately, the legal implications of each are completely separate from the personal finances of those involved, offering the most legal protection for business owners.
If involved with starting a business and in need of assistance for determining which representation is right for you, the accounting experts at Bloch, Rothman, and Associates
will be happy to help you. Our trained associates can help ensure your tax implications for each type and assist in finding the most beneficial type of designation for your business. Known for also providing excellent service in payroll assistance, Bloch, Rothman, and Associates can help with a variety of accounting or bookkeeping needs. Whether you require an explanation for a random tax form, are potentially in need of appropriate representation in tax court, or could use help in potentially a variety of other various services our tax experts are ready and willing to assist. Call 303-321-7160 or contact us
for your initial free no obligation consultation.