Question

Let's suppose that you are looking to start your own business. This is a limousine company that provides transportation between customer's homes and airports, train stations, etc. The first question is, what type of business organization would you select for your business? Be sure to thoroughly explain your rationale for your decision. Anyone?

Answer 1

If we starts a business organisation that provides transportation between customer's homes and airports, train stations, etc , it would be better to have a "Sole Proprietorship" enterprise because

i) Control : Under the Proprietorship business, we have a good control on the business as there is no other party to intervin the opertion of the business.

ii) Low Turnover : As the transportation business depends on the customers from the house-holds, so the business turnover would be low and execution of the orders would be under control.

iii) Tax simplification : The personal and the business return would be filed under the same income tax return, which will simplify the things.

iv) No legal formalities or licensing : Under the proprietorship, there would not be much a formalities or licensing requirement.

v) Easy to start and close : The business of the transportation is very low profile and risky business, so it get easy to start and close the enterprise if business getting becomes difficult. On the other hand, formation and closing of other type of business like partnership and corporation involves much a formalities and are difficult.

vi) Employees handling : There would not be much a hassel in handling the employees and the remuneration and other related matters if we go for the proprietory organisation.

Therefore, it would be appropriate to start the transportation business under the Sole-proprietorship.