Relevant issues the entrepreneur should consider in the evaluation process

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      Relevant issues the entrepreneur should consider in the evaluation process

Relevant issues the entrepreneur should consider

Relevant issues the entrepreneur should consider

There is no single best form of business. Each form has its own unique set of advantages and disadvantages. The key to choosing the optimum form of business is the ability to understand the characteristics of each business entity and how they affect an entrepreneur’s business and personal circumstances.

The following, are relevant issues the entrepreneur should consider in the evaluation process:

Tax consideration: In a graduated tax rates, the government’s (that is Local, State and Federal) constant modification of the tax code, and the year-to-year fluctuations in a company’s income require an entrepreneur to calculate the firm’s tax liability under each ownership option every year.

Liability exposure: Certain forms of ownership offer business owners greater protection from personal liability due to financial problems, faulty products, and a loss of other difficulties. An entrepreneur must evaluate the potential for legal and financial liabilities and decide the extent to which they are willing to assume personal responsibility for their companies’ obligations.

Start–up and future capital requirements: The form of ownership can affect an entrepreneur’s ability to raise start-up capital. Also as a business grows, capital requirements increase, and some forms of ownership make it easier to attract outside financing.

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