DBA: Forms of Business Ownership Essay

Paper Type:  Essay
Pages:  3
Wordcount:  587 Words
Date:  2022-07-05

One of a unique feature of DBA is that it enables one to conduct a business that is under the different name instead of using an individual's personal identity and name as the business face. The other unique characteristic of DBA is a given business DBA will be provided a state tax ID number that will permit someone to create a bank account through using their DBA. Therefore, the filing of DBA as a simple partnership or sole proprietorship makes it possible for one to open a bank account as well as receiving payment in DBA name that is used for a given business.

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One of the issues that a business owner must take into consideration while selecting a type of business ownership is a legal liability. A business owner must weigh the potential for financial and legal liabilities for the obligations of their companies. The other issue is a tax. Business owners must consider tax regulation as there are individual businesses which are heavily taxed as compared to others. The other problem is expenses, partnerships and sole proprietorships are more comfortable to establish that different types of companies since they need little money and less time to register.

Sole proprietorship refers to a business which is owned by a single person. A partnership is a type of business whereby there are two or more people who share profit, management, and liability for all company debts. Corporation refers to a kind of business which is legally defined whereby the business operates under the law, and it is liable for all business debts incurred.

An advantage of a sole proprietorship is the least and most straightforward type of business to operate and start. A disadvantage is that the business owners assume every debt liability incurred by the company (Abor, 2017). An advantage of the partnership is that it is easy to run and set up. A disadvantage of a partnership is that partners can become deadlocked hence having difficulty while running a business. An advantage is that the corporations only risk the capital that they have invested. And shareholders may sell their shares to others. A significant disadvantage of a corporation is the expense and difficult include in creating them.

One similarity between LLC, S corp, and a C corp is that they all need separation of personal and business finances. The other similarity is that owners pay individual income tax on the profits. They all require to venture capital as a way fo their financing. Another analogy that LLC, S corp, and a C corp have is that they desire to keep earnings such that they may help the business to expand.

One difference between C Corp and S Corp is that C Corp should pay the corporate income tax. S Corp is different from C Corp as it requires no more than hundred shareholders while C Corp may be made up of more than a hundred shareholders. LLC is different from other types of corporations in that it shields all personal assets from the business liabilities and has flexible tax options for reporting.

Conclusion

The form of business ownership that I would prefer is a sole proprietorship. I would prefer a sole proprietorship since the business, and the owner is the same, all expenses and income go straight to the business owner. The owner is then responsible for reporting those on their individual income tax forms.

References

Abor, J. Y. (2017). New Venture Development and Sources of Financing. In Entrepreneurial Finance for MSMEs (pp. 21-50). Palgrave Macmillan, Cham.

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DBA: Forms of Business Ownership Essay. (2022, Jul 05). Retrieved from https://proessays.net/essays/dba-forms-of-business-ownership-essay

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