Business Constructions

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 Business Structures Essay

Business Structures

Fin/571

06 15, 2013

Business Constructions

If someone wants to start a business, the face would have to decide which structure she or he would want to employ. To know what kind of composition he or she has to find out what kind of business he or she is trying to manage and who will run this with him or her. Structures vary from sole proprietorships and relationships to businesses. When firms first start up, they consider sole proprietorships or partnerships, but as they grow into larger companies, they become corporations. When someone first starts a business it could just be him or her, those corporations consider singular proprietorships, that means a business owned or operated by one individual. There are several positive aspects when managing a sole proprietorship. First can it be is the easiest type of organization to start and run and in addition it is not controlled as much. Likewise, sole proprietorships pay lower income taxes when compared with other organization structures. Previous, when a firm is a only proprietorship, decision-making rest within the owner's shoulders but the owner keeps most profits (Films Media Group, 2011). Though there are some incredibly good positive aspects owning a sole proprietorship, additionally, there are some drawbacks. The biggest advantage is also the most important disadvantage, the bills, financial obligations, and significant obligations. In the event the owner does not pay the bills, the organization cannot operate. Another big disadvantage is a capital the business enterprise has. If the owner does not have some different capital spent into the organization, the company will not likely grow. The past disadvantage is usually running the corporation when the owner leaves or dies. Because there is no one different with inventory, the owner needs to let the company go (Parrino, Kidwell, & Bates, 2012). The next organization structure is known as a partnership, which will consist of two or more owners that legally run the business with each other. With a relationship, the owners know what her or his position inside the company is definitely and how the gains would be split. There are two different...

References: Films Media Group (2011). Planning Your company: Research, desired goals, and organization plans [Video podcast]. Retrieved coming from https://newclassroom3.phoenix.edu/Classroom/ToolContainer.jsp?context=co&contextId=OSIRIS:40817068&activityId=16e92012-daa3-4692-89b0-622c50a227b6&profileId=4136b5d5-519c-4e35-a63a-f84741e11cd2&syllabusId=OSIRIS:40817068&version=

Parrino, R., Kidwell, D. S i9000., & Bates, T. W. (2012). Principles of Corporate and business Finance (2nd ed. ). Danvers, MUM: John Wiley & Daughters, Inc..

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