Business Structure Of A Business Essay

Business Structure Of A Business Essay

Length: 1106 words (3.2 double-spaced pages)

Rating: Better Essays

Open Document

Essay Preview

Business Structure
The most important factor when starting a business is choosing the right business entity. There are different business structures such as a sole proprietorship, partnership, limited liability corporation (LLC), and a corporation that a business owner can choose from. Making the right decision would depend on the type of business that an individual owns if there are more than one owner, the way the owner chooses to run the business and the financial position of the business. Finding the right structure one needs to have an understanding of how each one is formed, the personal liability for the owners, taxation, and the advantages and disadvantages of each structure before choosing which structure best fit for the business.
Steps to Form
The sole proprietorship is the least expensive to form. However, there are permits and licenses for the business. These are usually determined by the state and what type of business you are in and the locality of the business. The name of the company that is chosen must be one that is not already used by someone else (Choose Your Business Structure, 2013). If the owner is forming a business on a regulated financial plan or a firm framework, this would be the one to choose from. If there is going to be only one owner, the sole proprietorship would be the one to use.
If there is going to be more than one owner, the partnership would be the best one to choose. The partnership is a structure that has more than one owner and each partner participates in all aspects of the business, such as property, labor, money and skills. Both partners also shares in the losses and profits of the business (Rogers, 2012). A partnership contract should be made to establish how future decision making...


... middle of paper ...


...the shared and individual liability. The partners are liable for their own actions and business decisions, debts and decisions that other partners makes. The personal assets of all partners can be acquired to pay for the partnership’s obligations (Mancuso, 2015).
The LLC has the limited liability, meaning that the members are not responsible for personal liabilities for the actions or decisions the LLC creates. For example, if the limited liability corporation has debt obligations and they go to court the member’s personal assets are relieved. However, members are not automatically protected from wrongful acts, as well as actions by their employees (Mancuso, 2015). The liability of the corporation is the same as the LLC. However, in the corporation, shareholders can be held liable for their investments in stock of the corporation.
















Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Business Structure Of A Business Essay

- Business Structure The most important factor when starting a business is choosing the right business entity. There are different business structures such as a sole proprietorship, partnership, limited liability corporation (LLC), and a corporation that a business owner can choose from. Making the right decision would depend on the type of business that an individual owns if there are more than one owner, the way the owner chooses to run the business and the financial position of the business. Finding the right structure one needs to have an understanding of how each one is formed, the personal liability for the owners, taxation, and the advantages and disadvantages of each structure before...   [tags: Corporation, Limited liability company]

Better Essays
1106 words (3.2 pages)

Essay on Choosing Business Structure

- Starting a business can seem like a daunting task, when really there is a systematic approach that an entrepreneur can take to setting up a business. There are many factors to consider when setting up a business structure; these factors include start up cost, operating costs, liability, and taxation. A business owner will also want to look at whether or not they may want to expand in the future, which will also play a factor in what type of business they should set up. This paper will look at the advantages and disadvantages of sole-proprietorships, partnerships, limited liability companies, and corporations....   [tags: Business Management]

Better Essays
2042 words (5.8 pages)

Business Structure Of The Entertainment Industry Essay

- Part B There are different types of business structure that can be utilised in the media and entertainment industry as because the entertainment industry is quite dynamic and challenging in nature. Each promoter in the entertainment industry should use the business structure they find to be most appropriate in addressing their business needs and to avoid he issues that will arise in the future. There are some business structures promoters could use in the entertainment industry to promote events and gain finance, like: Partnership Partnership is the relationship that exists between persons carrying on a business in common with a view to profit....   [tags: Partnership, Corporation]

Better Essays
757 words (2.2 pages)

A Couple Types Of Business Structure Essay

- Question 1: There are a couple types of business structure in Australia. Businesses in Australia are run by Sole traders, Partnerships, Companies and trading trust. However, each kind of businesses has its own legal rules, purpose and benefits . With organizations the statutory provision is contained in the relevant companies’ legislation . With partnerships the relevant law is contained in the partnership Act in each of the jurisdictions .I will discuss only the partnerships and the companies in term of its business structure, the advantages and disadvantages by conducting business of both types and which one could be preferable to another structure....   [tags: Corporation, Partnership, Types of companies]

Better Essays
1084 words (3.1 pages)

Servant Leadership : A Business Structure Essay

- Servant leadership is a concept that has proven effective in almost all business formats. Servant leadership involves a business structure that works from within to the outside. The number one tenet of servant leadership is to develop customer service and employee loyalty and satisfaction. Servant leadership wants a company to develop customer service as a must and an important part of all business practices “the customer is always right” is a simple way of expressing this principle. This does not mean returns and dissatisfactions, it does mean taking into account what will make customers happy and loyal....   [tags: Management, Entrepreneurship, Leadership]

Better Essays
1187 words (3.4 pages)

Determining The Right Business Structure Essay

- QUESTION 1 Determining the right business structure is an integral part of establishing and managing a successful business. The characteristics of each business structure are an important part of determining whether it is the right structure for a wide range of businesses. Partnerships Due to its characteristics, many people will choose to conduct business as a partnership. A partnership is defined as a relationship between two or more bodies who have shown that they are carrying on a business in common, with a view of making profit....   [tags: Corporation, Partnership, Limited partnership]

Better Essays
1377 words (3.9 pages)

Essay about International Business Structure

- There are four theoretical constructions relating to market structures, these are oligopoly, monopoly, perfect competition and monopolistic competition. Each theory has its individual assumptions and norms. In turn, these theories will be analysed, compared and contrasted with real life examples. The market structure related to each business reflects the profit maximisation and productions of the firms. The demand curve will also vary depending on the market structure; MC=MR. Perfect competition is representative of a competitive market; customary firms sell homogenous products such as milk or potatoes....   [tags: market structures, monopoly, oligopoly]

Better Essays
965 words (2.8 pages)

Essay on Business Structure

- When starting your own business, there are many different things in which you need to do before opening your doors up for business. From the idea itself, you then must choose a location, finance the business, and figure out what type of business structure your business is. Depending on which type of business structure you are, you have a specific income tax form in which you have to file with. The five types of most common business structures according to the IRS is, Sole Proprietorship, Partnership, Corporation, S Corporation and Limited Liability Company....   [tags: Income Tax, Liability Protection]

Better Essays
917 words (2.6 pages)

Business Structure : Sole Trader, Partnership, And Company Essay

- There are some basic business structures can be applied in different type of business and that use them. There are different basic organization structures first one is sole trader, partnership, and company. Here every individual organization structure have own features as well as some advantages and disadvantages from their own point of view. The organization structure can be applied on base the situation that what type of business position and structure can be adopted. Here there are different structural of organization are follows with their advantage and disadvantage....   [tags: Corporation, Types of companies, Business law]

Better Essays
889 words (2.5 pages)

Essay about Home Depot Structure Analysis

- Home Depot was founded in 1978 by Bernie Marcus and Arthur Blank in Atlanta, Georgia. With their store, Marcus and Blank revolutionized the do-it-yourself home improvement market in the United States. Home Depot began as a very basic store, operated in a large, no-frills warehouse. Home Depot carries over 35,000 products, with national brand names along with the Home Depot brand. At the start, Home Depot was able to offer exceptional customer service with knowledgeable employees who could guide customers through home renovation projects....   [tags: Business Structure]

Free Essays
1713 words (4.9 pages)