Forms of Business
Sole Proprietorship (Sole Trader): A business owned by one person. Easy to set-up and is the least expensive form of ownership. Recommended for first time and small businesses.
Partnership: Business is owned by two or more people who contribute capital, share liabilities, and divide profits based on agreed terms. Commonly utilized in contractor occupations such as dentists, solicitors, medical therapists, and accountants!
Corporation (Joint Stock Company): A business organization that has a separate legal personality from its owners. Ownership is represented by shares of stock. The owners (stockholders) have limited liability but little involvement in company operations. A board of directors, elected from the stockholders, control the direction of the company.
Limited Liability Company (LLC): A business structure where owners are not personally liable for company debts or liabilities. LLC's are hybrids that combine traits of a corporation with those of a partnership or sole proprietorship.
Trusts (Discretionary/Unit): Business structure set up through a trust deed where an individual or company carries out the business on behalf of the trust’s members (beneficiaries). The trustee is legally liable for the trust's debts and may use its assets to meet the debts. If there is a shortfall the trustee is responsible for the difference.
Service: A business that offers and provides intangible products such as professional skills, expertise, advice, and other similar products.
Examples: Hospitality, fitness training, cleaners, beauty salons, photography, and accounting!
Merchandising: A business that buys products at wholesale price and the distributes and sells them at retail price without changing the products form and function.
Examples: Grocery, hardware, clothes/accessories shop, consumer electronics, home furniture, appliance stores, drug stores.
Manufacturer: Business that buys and combines raw materials to produce a product to sell.
Examples: Food processing, vehicle manufacturing, oil and chemical refining.
A business can also be more than one type. Bakeries, for example, can be all three. They process raw materials to create food (manufacturing), sell their baked products wither directly from their location or sell to a distributor at wholesale (merchandising), and can offer to create custom confections such as cakes (service).
So you have an idea for your own business and want to begin developing and planning for it. Congratulations! Making the decision to join the marketplace is the first step.
So what's step two? How do you step off on the right foot? Maybe you've tried searching online for information and advice on where to start, but wound up overwhelmed and uncertain of which sites and resources to trust. Who can you turn to for help with all the risks that come with a business?
Accounting Alternatives have you covered there too. We're more than just accountants; we're also entrepreneurial advisors. With years of experience and backgrounds in business management and ownership, we can help guide you for a steady start and provide advice and resources to further map your path.
First we'll need to know what type(s) and form of business you wish to operate and set up:
The most common forms of business are listed above, but there are sub categories and more
such as Limited Liability Partnerships, Franchises, Non-Profit Corporations, and Co-Ops that may also apply to your situation. Each type and form have their pros and cons and different rates of risk and reward. To figure out the best choices or combinations for your business blueprint, we'll guide you through choosing the best option for your vision.
Afterwards, we can best guide you on how to plan for your future along with assistance in:
New Business Registration
Employer ID number
S Corp Election
State Sales & Withholding
Starting any business seems overwhelming. But it doesn't have to be with the right knowledge and support. We at Accounting Alternatives know the hurtles and potential pitfalls of getting your ideas off the ground and into a steady trade flow. Our experienced entrepreneurial staff are the ready to help you start your venture . Businesses are part of every neighborhood, and we're enthused to welcome you into the district of local and global business.