A sole proprietorship is a type of business that is owned and operated by one person who is responsible for all the debts. Forming the business is really easy to start off with. Also the owner receives all the profit from the business and is his or her own boss. The down side to owning a sole proprietor business of your own is it is really hard to find sources for funding the business for it to grow and expand. An example of a local proprietor business is Martha’s Kitchen. Martha’s kitchen is a really small restaurant on the outskirts of town. Martha chose to open a diner at her location because it is joined with a gas station and it is in a remarkable location for a restaurant business. Martha’s kitchen is open from 5:30 a.m. to 11:00 p.m. She serves the best peach cobbler around.
A general partnership is when two or more persons decide to share the responsibility of operating a business together. The partners are also equally responsible for all the company debts incurred by each partner. The combined partners in the business allow the business to grow very easy because it is very easy to find sources for funding and investors. The biggest disadvantage that a general partnership has is the difficulty of transferring ownership or selling out because of having the consent of the other partners. An example of a local general partnership is Rest My Friend Lawn Care. The lawn care business originated as a sole proprietor but now it is a family business with several partners. Blake, Larry, and Tracy chose this type of business because they were able to invest in the business and to this day they are making a great profit out of the business.
Corporations are the biggest type of business out of all three. Corporations are considered to be separate from the owners and they are liable for their own debts. When investors invest in a business they are held liable for only what they invest in the company in event of failure.
Corporation – “A business organization that exists as a legal entity and provides limited liability to its owners.” (Longenecker, Petty, Palich, Hoy, Pg. 205) The main advantage of a corporation is that the business liability falls onto this entity instead of the individuals that own it. The disadvantages of this organization are found mostly in its formation. A corporation is expensive to create and requires compliance with state
A General Partnership is composed of two or more persons (usually not a married couple) who agree to contribute money, labor, and/or skill to a business. Each partner shares the profits, losses and management of the business and each partner is personally and equally liable for debts of the partnership. In terms of asset protection, general partnerships can be even worse than sole proprietorships.
Partnership is generally straightforward and need low costs to be framed it just require an understanding between the parties. All partners evolve in the administration and making the decision as they all have the right to help in any decision. As they are a number of partners that implies they have a much greater source of funds than a sole trader. On the other hand, the Disadvantages of partnership are that it doesn 't have a legitimate identity of its own. The survival issues, as the partnership will be broken up in light of the death of the partner or regardless of the fact that the partner went insolvency. Endless obligations, where the debts in partnership might be taken generally as it could be taken from their own assets to settle the
Bob is looking for this business to help him and provide for a future for his daughter to carry on the business. A C Corporation provides growth potential and investment opportunities while keeping the business and personal finances separate. A C Corporation can have unlimited shareholders and potential investors
One awesome advantage that comes with an LLC, other than the protection from legal liabilities like stated above, is the ease of getting it. They also take much less paperwork and effort to get started so they are fairly cheap. Another nice plus that comes with an LLC is that you have fewer restrictions on how you can divvy out your money(profit sharing). In my opinion corporations actually have two of the best advantages out of all the available options. Being a corporation allows you to sell stock, so you
The three main business organisation structures considered by Steve and Wonder are partnerships, trusts and companies. In order to understand the key differences between the three and to put forward a recommendation for the most apt structure, it is essential to grasp the basic definition of each .
This particular statute allows for corporations and such to obtain several, but not all, constitutional rights as any person or persons. In particularly own property, sue and be sued under criminal and civil law, enter contests. Moreover, because corporations and such are considerate as “person”, business has the legal rights for its debts and damages. On the contrary, persons who are employed by a particular association are liable for their own misconduct and law-breaking while acting on behalf of a corporation. In addition, corporation has rights for its own actions, has rights such as: limited free speech and to advertise their product ("The Rights of Corporations," 2009). Likewise, businesses have the responsibility to elect a CEO, provide continuity; increase profits, social responsibilities, and manages recourses effectively (“Functions & Responsibilities of a Corporation").
Sole Proprietorship: This a type of organizational form “where there is no legal distinction between the business and its owner”. ( ) Are easy to start, as well as relocate. There is complete autonomy over every aspect of the business and 100% of the profit is retained by the owner and only taxed once. Although there is often a high tax rate on the profit and the capitol needed to start or grow the business can only come from the sole owner or their personal means of credit. Because the business and the owner are legally the same entity there is unlimited liability to the owner to honor all contracts. Also due to the lack of legal separation the business ceases to exist upon the death of the owner.
Companies are enterprises, also the legal person, so companies are business entity. It’s also as the business entity, different with other non-business legal person in sociality, for example: Swansea University and Morrison Hospital. Company as business entity, the distinction with non-business legal person is business is profitable legal person; A company is an artificial person. Once it is incorporated by complying with the prescribed procedure, its come into being and is a separate legal entity from its members and officers. This principle distinguishes a company from a partnership.
A second kind of non-incorporated business organisation is a partnership. There is no upper limit to the amount of individuals in a partnership but it is rarely more than twenty. In order for a partnership to form, a contract must be drawn up and signed
This is a firm to be considered to be a legal entity that is separate and distant from the owners, meaning its established by law and given some legal rights and duties of a human being. It follows rules by governing how it is organized, and how it conducts business which is called corporate by laws. A corporation can act as any business activity, it can enter into binding contracts, borrow money, own property, pay taxes, it can proceed in to legal action (such as law suits) in its own name it can also partner in a partnership or owner of another corporation, there is a longer process obtaining this form there is more paperwork and higher fees, unlike a sole proprietorship and general partnership it requires filing articles and paying filing fees. Stockholders (owners) elect individuals to represent their intrests which is called a board of directors, these directors they establish the missions for the corporation and its objectives. It can also transfer ownership very easy owners sell their stocks they can sell it to the public, however, a stockholder has to sell it to another stockholder if no one is interested then the stock can be sold to the public, so this type of form is required for large company’s such as apple and
...s of a partnership are the shared profit factor, which can cause a lot of animosity among the partners if things do not go as well or if there is an unequal amount of contribution among the partners. Additionally, there is both individual and joint liability with partnerships. This can often cause dissention between the partners (“SBA”). Essentially, the sole proprietorship is the best choice because the risks are minimal because it is solely one individual, who can make the best choices and decisions and deal with the consequences that arise accordingly.
Before a partnership formation is imminent, the business needs to decide on which type of partnership to form. There are three types of partnerships: (1) general partnerships, (2) limited partnerships, and (3) joint ventures. All three partnerships contain two or more owners, but all partners assume equal division of ownership, liabilities, and profits in a general partnership. Limited partnerships offer limited liability protection based on each partner’s contribution percentage. Joint ventures are classified as general partnerships with limited existence periods. Once a type of partnership has been determined, the business fulfills a series of requirements before the partnership can be successfully formed. The first step is to register
There are many advantages and disadvantages when owning your own business. When you own you own business, it’s known as a sole proprietorship. But with any type of business, there will always be advantages and disadvantages.
Partnerships are the most common business structure for businesses that have more than one owner. Many businesses, ranging from retail stores to accounting firms, are structured as partnerships. A business partnership is a for-profit business established and run by two or more individuals. There can be any number of partners involved in the business, as long as there are at least two. A business partner is a co-owner of the business.