College and university career centers are great resources in this evaluation process. The structure of a business affects tax and legal liabilities. Sole proprietorships, the simplest business structures, may be preferable because they allow for total independence and control, but are susceptible to legal liabilities. With no separate legal existence apart from the owner and no additional tax liabilities apart from the owner s liabilities, any debt that the company incurs also becomes personal liability. Thus, if a customer sues a sole proprietorship for not fulfilling a contract, all the business owner s personal assets are left vulnerable to the suit.
Partnerships allow the expenses and profits to be shared.
The costs and income are divided equally according to a previous agreement. Such agreements usually depend on the amount of money, property and other investments the partners have contributed to the business. Partnerships are similar to sole proprietorships in their tax and liability issues, and all partners are fully responsible for liabilities. Corporations are legal and taxable entities separate from the individuals who invest in them. Investors are protected from liabilities associated with the corporation.