Why is it important for entrepreneur to determine the legal form of business ownership? When choosing the...

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Whyis it important for entrepreneur to determine the legal form ofbusiness ownership? When choosing the legal form, what kind of taxconsiderations to make?

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Of all the choices you make when starting a business one of the most important is the type of legal structure you select for your company Not only will this decision have an impact on how much you pay in taxes it will affect the amount of paperwork your business is required to do the personal liability you face and your ability to raise money Heres a quick look at the differences between the most common forms of business entities A sole proprietorship is the most common form of business organization Its easy to form and offers complete managerial control to the owner However the owner is also personally liable for all financial obligations of the business A partnership involves two or more people who agree to share in the profits or losses of a business A primary advantage is that the partnership does not bear the tax burden of profits A primary disadvantage is liabilityeach partner is personally liable for the financial obligations of the business A corporation is a legal entity that is created to conduct business The corporation becomes an entityseparate from those who founded itthat handles the responsibilities of the See Answer

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