University Of Phoenix
University of Phoenix
FIN/571
Kent Kelly
1/11/15
Susanne Elliot
1.
There are many reasons why a company may or may not become successful but one area of success for a company has always been the company’s foundation or structure. There are many structures for a business that will provide both advantages and disadvantages. This paper will discuss each structure.
Business Structure
There are three types of business structures, partnership, sole proprietorship and a general corporation. Each structure has its disadvantages and advantages but the key is doing the research to determine which business structure will be suitable for your business venture. Many people may not be interested in running a small business so a sole proprietorship may not be the favorite structure to start with, or maybe when starting a business you may want your company to start small but eventually run as a corporation. Whatever the case may be one must understand the advantages and disadvantages of each structure.
Sole Proprietorship
The most inexpensive and easiest way to get a business started is a sole proprietorship. The sole proprietorship business structure allows for a business owner to have complete control over decision- making in the company. Along with no corporate taxes, there is minimal startup costs when creating a sole proprietorship compared to other business structures as well as few business requirements.
One major disadvantage of a sole proprietorship is that the business owner is held personally liable for all obligation and debts that the company may occur. If the business begins to fail and the owner is not able to cover all cost associated then the owner will find themselves in a bankruptcy
FIN/571
Kent Kelly
1/11/15
Susanne Elliot
1.
There are many reasons why a company may or may not become successful but one area of success for a company has always been the company’s foundation or structure. There are many structures for a business that will provide both advantages and disadvantages. This paper will discuss each structure.
Business Structure
There are three types of business structures, partnership, sole proprietorship and a general corporation. Each structure has its disadvantages and advantages but the key is doing the research to determine which business structure will be suitable for your business venture. Many people may not be interested in running a small business so a sole proprietorship may not be the favorite structure to start with, or maybe when starting a business you may want your company to start small but eventually run as a corporation. Whatever the case may be one must understand the advantages and disadvantages of each structure.
Sole Proprietorship
The most inexpensive and easiest way to get a business started is a sole proprietorship. The sole proprietorship business structure allows for a business owner to have complete control over decision- making in the company. Along with no corporate taxes, there is minimal startup costs when creating a sole proprietorship compared to other business structures as well as few business requirements.
One major disadvantage of a sole proprietorship is that the business owner is held personally liable for all obligation and debts that the company may occur. If the business begins to fail and the owner is not able to cover all cost associated then the owner will find themselves in a bankruptcy