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As a small business owner or an accountant providing advice to your client, please discuss at...

As a small business owner or an accountant providing advice to your client, please discuss at least three primary factors you would consider in the identification of a suitable entity for a new business enterprise.

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Three Factors that I would consider in the identification of a suitable entity for a new business enterprise are as follows.

  1. Ease of Formation. First think I would consider is what are the formalities that I need to follow to establish my enterprise. The level of complexity in starting different kind of entity is different from each other. Starting a Company is a lot more technical than starting a proprietorship or partnership firm.
  2. Control of Ownership/Division of control. This is rather an important consideration because the owner of the company wants to secure his position in his business. In case of a company the shareholders are owners of company and every new issue o shares is a division of ownership. This does not happen in sole proprietorship firm. In a partnership firm the owner gets to decide who to make partners with.
  3. Tax treatment. Different enterprises attract different rates of taxes. Before going for any king of business the owner considers what will be the tax implications of the selection he made for his enterprise.

ekkarill92 answered 1 year ago
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