Essay about FIN/571 Business Structure Advice

| A sole proprietorship is easy to create; there is minimal creation cost and time.The single owner has autonomy in decision making; sole owner makes all decisions related to the business and has complete ownership of business’s finances.

- This type of business is easier to control as the owner would have a hands-on approach to running and making decisions for the sole trader.

Corporations are a different type of business. They are more complex to start because more paperwork is involved and the corporation generally has to be registered at the state level. An ordinary corporation is formed through the articles of incorporation. These corporations are legal entities, and therefore bear legal responsibility. The shareholders of the corporation do not bear legal liability. In addition, corporate income is taxed differently it does not flow through to the owner's personal income tax statements. The

Convenience - Usually the least costly to begin. Sole proprietorships are easy to start up. They entail acquiring the proper licenses and permits. Regulations very from industry, state, and county. There is no administrative configuration.

Among a few types of Business Ownerships Sole-Proprietorship, Partnership and Corporation Business will be discussed below.

Other business structures are double-taxed at the business and personal income level. And some businesses are run by multiple owners, so personal liability is divided.Here are the general descriptions and advantages/disadvantages of each business.

With a desire to be an entrepreneur, Shania has to determine what type of business structure that best represents her business. There are a variety of business structures that Shania can use to establish her business. These specific types are a sole proprietorship, corporation, partnership, limited partnership, limited liability company, and a few others (U.S. Small Business Administration, 2015). Each of these structures has their unique differences and characteristics.

There are different aspects of each type of business structure, sole proprietorship, partnership, LLC, and corporation. A sole proprietorship is “a business owned and operated by a single person. The business has no legal existence from its owner” (Rogers, 2012). This also means that the sole proprietorship is liable for everything, debts, lawsuits, taxes, etc. In a partnership, “an association of two or more competent persons to carry on a business as co-owners for profit. The business itself is not a legal entity” (Rogers, 2012). In a partnership any members of the partnership, which has to be more than two persons, can be held liable for the same as a sole proprietorship, the debts, taxes, etc. There are also limited partnerships which will be created when filing with the state, with one general and at least one limited partner. This makes it so the limited partner will not be personally liable for the debts of the business. An LLC, Limited Liability Company, can be formed via an application to the state and will try to combine the advantages of partnerships and corporations. Therefore, an LLC will protect an individual more than a partnership would. Lastly, a corporation is “a business entity that is formed through application to the state, which allows shareholders limited liability. Corporations have the legal status of persons and a corporation will also protect the individual, much like an LLC would.

The different types of business structures include sole proprietorships, partnerships, and corporations. These business structures also offer different options within themselves. A business that is owned and managed by a single individual is a sole proprietorship. There are three categories of a partnership – general partnerships, limited partnerships, and limited liability partnerships. A corporation can be closely held or publicly held. Let us see what the advantages and disadvantages are for these different business structures.

Ascertain a legal structure, which depends on the level of control one want to have, business vulnerability to lawsuits and the financing needs. The type of legal entity chosen will determine the additional registration requirement, that is, one may have to register with states and/or local government after deciding on the legal structure and this consideration changes from state to state.

The process of starting a business can be a challenging one. From choosing a business name, identifying the product to sell and where all require thoughtful decisions. All these decisions also need legal and practical considerations. To understand more about the different forms of business, it is important to consider the right structure for the business (Legal Forms, 2006).

Organisation can be categorized by legal structure. They are sole trader, partnershiop, private or public company, government, voluntary organisation, co-operative, charitable and not-for-profit organisations and franchise.

Business impacts each part of individuals lives. Acquiring goods or services that are obliged day by day to keep up and fulfill lives are the reasons why organizations succeed. Creating a business can be a troublesome assignment, when a person starts a business so many risks can develop. Not only is he or she considering the risks but the most important decision one has to make is to select the type of legal structure for the organization. This decision will have an impact on the amount of paperwork the business will be required to do. In order to secure the future success of the business it is important to select, plan, and organize the ideal business that fits best. The sorts of business substance picked comprise of three regular structures know as sole proprietorship, partnership, and corporation.

We will start with sole proprietorship in which the owner and the business share the same entity , all the owners belongings and obligations are considered to be business belongings and obligations, the business is not consider as a separate taxable entity.

As the business world expanded, there developed a need to categorize businesses into various organizations. Business organization forms were hence established by law and are regulated in their operations. There is a wide range of these business organizations, but the major ones are sole-proprietorship, limited liability companies, corporations and partnerships (Baron & Shane, 2008, p. 244).