Also, true start-up costs are not easy to determine. Initially, you may not be able to pay yourself a salary or draw expenses from company funds. You don't have a trade record to guide you or help you plan what to do. And it takes a lot of time to develop your product, build your customer list, establish a reputation, and become profitable. There are a number of legal forms of business organization.
Different ones meet different personal and business needs.
Proprietorship means that you are personally responsible for all debts and the other legal liabilities of your business. The income from your business is reported as part of your personal income and taxed accordingly. A partnership includes two or more people in business together with each partner liable for whatever happens to the business and for the other partner's actions. If the partnership is a limited one, partners are only liable up to the amount of capital contributions. Your share of the income from the partnership is reported as part of your personal income and taxed accordingly.