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The Three Forms of Businesses
Home » Freelance Writing » Self-publishing » The Three Forms of BusinessesThere are three types of business structures. When starting your business you must determine which type of business structure you are running. On your tax form you will be asked which type of business structure you are operating under.
• Sole Proprietorship – It is recommended that you start your business as the sole proprietor, which means that the business is owned only by you, and you control the business. With sole proprietorship, all income is considered personal income. On the flip side of that, all debt your company incurs is considered personal debt. Over two-thirds of companies in America operate under sole proprietorship.
• Partnership – A partnership is when you team up with either another writer or acquire a financial backer for your business. In a partnership, each partner is completely responsible for the business. This can be a complicated business structure and does not have a very good success rate.
• Corporation – As businesses grow they are sometimes incorporated. This type of structure is generally not for a business just starting out. In a corporation, you are an employee of the business, and not the company itself. In a corporation you are responsible for paying Social Security tax and unemployment taxes. After establishing your business, the advantage to incorporating is that you can set up employee benefits and qualify for tax shelters that are not available to sole proprietors.
Related Self-publishing Articles
- Self-publishing Overview
- Advantages to Self-publishing
- Starting Your Own Publishing Company
- The Three Forms of Businesses
- Creating a Quality Product
- Marketing and Promoting Your Book