Small Business Idea
Diane M. Jones-Sutton
May 28, 2012
Small Business Idea
With the help of government released funds for creating small business the small business idea that wants to be started is possible. In the following a look at the decision on which type of the four forms of business organizations would best suit the unique product or service considered for this business, the legal, tax, accounting, and other implications when selecting the four business types will be touched. The advantages and disadvantages of the four different forms of business organization and the different types of financial statements associated with each form of business. The consequences associated with each form of business organizations in the implication of tax, ...view middle of the document...
The four forms of business are Sole Proprietor, Partnership, C Corporation, and S Corporation. Each form is a good choice for businesses, but making sure that the right one for the new business is important for success. The most common form of business is the sole proprietor. As a sole proprietor the proceeds from the business will belong to the sole proprietor and do not need to be split among partners.
For the venture that is being created the sole proprietorship will be the chosen form of business. The boutique of handmade gifts that will be the business being started will feature handmade gifts made by the sole proprietor. These items are unique and many are one of a kind item along with made to order items. The items that are to be sold are creations of the sole proprietor so this is the reason that this form of business was chosen. If several friends were to gather and create gifts together then the partnership or corporation form would have been the form of business to use.
Legal, Tax, and Accounting
Having legal representation is a good idea with any business. Having someone who knows the laws associated with doing business will help the business owner in any of the forms of business to not break the law and risk fines or jail time. In 2002 the Sarbanes-Oxley Act or SOX was created so that businesses could be in compliance with legislature. “The Sarbanes-Oxley Act is arranged into eleven titles. As far as compliance is concerned, the most important sections within these are often considered to be 302, 401, 404, 409, 802 and 906” (Unknown, n.d). Business owners should also have an accountant on retainer to ensure that the bookkeeping is correct and that any tax laws are compiled with or any new tax laws are followed.
Unknown, (n.d.) A Guide to The Sarbanes Oxley Act, retrieved on May 25, 2012 Guide To The Sarbanes-Oxley Act