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Common Forms of Business Ownership in the US Essay

Common Forms of Business Ownership in the US

Table 1: Comparison of Types of Business Ownership in US

Form of Business
Requirements to start up such business
Sole Proprietorship
Easy set up & understand.
Personal liability, self-employment tax.
No state filing required
Can allocate income and expenses as agreed among partners
Liable for actions of other partners. Self-employment tax.
Agreement between two or more parties. No state filing required
100% deductible health insurance, fully deductible medical reimbursement and fringe benefits plans,   up to $50,000 profits are taxed at 15% if left in the corporation rather than at your  higher, personal income tax rate.
Cannot use corp. expenses to offset your personal income. if corp. has a lot of profits, doublet taxation occurs
State filing required
No Social Security or Medicare taxes
No health insurance deduction and limited deductions for home office
State filing required
Combination of the tax benefits of a limited partnership with the liquidity of a publicly traded company.
Unattractive to tax-deferred funds, who must lose this tax saving advantage
State filing required
Limited Liability as in a corporation with pass through income benefits of a partnership.
Self employment tax, unsettled and insufficient law issues as to the legal and tax treatment of this entity.
State filing required

Figure 1: Pie Chart Representation for Percentage Distribution of Business Ownership in US

Works Cited

Unknown. “Compare Business

Need essay sample on "Common Forms of Business Ownership in the US"? We will write a custom essay sample specifically for you for only $ 13.90/page

Types.” 2001. Business Name USA. 14 Sept. 2006
< http://www.businessnameusa.com/infotable.htm>.

O’Rourke, Patrick. ” Total Number of US Businesses.” BizStata.com. 14 Sept. 2006 < http://www.bizstats.com/aboutus.htm/businesses.htm >.


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