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Business form part 1

posted Jul 28, 2014, 4:55 PM by Surendra Dhanpaul   [ updated Jul 29, 2014, 4:55 PM ]
One of the questions many entrepreneurs hear from their accountants / lawyers and even friends is "is your business registered?" Well registration of a business can take a few forms. The primary forms are:
1. Sole Proprietor
2. Incorporated (Corporation)
3. Partnership

In this section I will give you a brief summary comparison of how these forms differ. 

Summary Comparison

 Form

Features
 Sole Proprietor Corporation Partnership
 1. Start upSimple, get licence and operateComplex, Follow procedures to formation, get licence and operateSemi-simple, develop partnership agreement, get licence and operate
 2. Legal/Gov. ControlLowHighMedium
 3. OwnershipOwned by investorShareholderInvestors/Partners
 4. LiabilityUnlimitedLimited Can be either Limited/Unlimited or Both
 5. ProfitBelongs to ownerBelongs to CorporationSplit base on Agreement
 6. TaxationSingleDoubleSingle
 7. PropertyMust generate Revenue (sales)Whatever is in the Corporation’s  nameBased on Agreement
 8. EmployeeNot employee, makes no differenceAffects profits, makes no difference on income taxAffects profits, makes no difference on income tax
 9. EndDies when proprietor diesDoesn’t die if shareholder diesEnd & begins as partner enters and leaves


I will try to give more details of these comparison in a different post.