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| Starting a business from home (a small business from home) is a great oportunity. Before You start a working from home business read this report, how to start a business from home.
Starting and Managing a Business From Your HomeChoosing Your Form Of Business OrganizationOne of the most important decisions you will make is how to set up the business as a 1) sole proprietorship, 2) partnership, or 3) corporation. Remember, the small business owner risks it all, no matter what form of organization.The forming of a business organization depends on the following factors: Legal restrictions Need for capital Liabilities assumed Number of people associated in the venture Kind of business or operation Tax advantages or disadvantages Intended division of earnings Perpetuation of the business Most home-based businesses are sole proprietorships or partnerships, but a comparison of the advantages and disadvantages of each type of organization follows: A sole proprietorship is the least costly way of starting a business. You can form a sole proprietorship by finding a location and opening the door for business. There are the usual fees for registering your business name and for legal work in changing zoning restrictions and obtaining necessary licenses. Attorney's fees for starting your business will be less than for the other forms because less document preparation is required. Sole ProprietorshipAdvantages DisadvantagesEasiest to get started * Unlimited liabilityGreatest freedom of action * Death or illness endanger business Maximum authority * Growth limited to personal energies Income tax advantages in * Personal affairs easily very small firms mixed with business Social Security advantage to owner A partnership can be formed by simply making an oral agreement between two or more persons, but such informality is not recommended. Legal fees for drawing up a partnership agreement are higher than those for a sole proprietorship, but may be lower than incorporating. You would be wise, however, to consult an attorney to have a partnership agreement drawn up to help resolve future disputes. PartnershipAdvantages DisadvantagesTwo heads better than one * Death, withdrawal, orbankruptcy of one partner Additional sources of endangers business venture capitalBetter credit rating than * Difficult to get rid of bad corporation of similar size partnerHazy line of authorityYou can incorporate without an attorney, but you would be unwise to do so. You may think a small family corporation does not need an attorney, but an attorney can save members of a family corporation from hard feelings and family squabbles. Attorney's fees may run high if organization problems are complex. The corporate form is usually the most costly to organize.CorporationAdvantages DisadvantagesLimited liability for * Gives owner a false stockholders (while true sense of security for big business, may not be for small business) * Heavier taxesContinuity * Power limited by Charter Transfer of shares * Less freedom of activity Easier to raise capital * Legal formalities Possible to separate * Expensive to launch business functions into different corporations
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