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Business Structure

Partnership: this type of business where a few people share the responsibilities (profits, liabilities and assets) between each other. This structure is defined as involving with a few people.

Examples of a Partnership: Medical Practices, Law Firm, and Family Ventures are prime examples of partnerships. All of these involve multiple owners that have a say in how the business is ran.

Disadvantages to a Partnership: There is a lack of trust as one partner can withdrawal from the business at anytime. There cannot be a decision without consent from the other partner. Partners are liable for other partners through joint and several liability; a third party can sue one of the partners and the other partners have to pick up the debts that the other partner cannot pay.

Advantages to a Partnership: These partnerships are easy to start up and there is more contacts between the people. There is also more management with more owners. Between more owners there is an ability to raise more funds.

Limited Liability Company: This kind of company involves corporations, sole proprietorship and partnership.

Examples of a Limited Liability Company: Chrysler Automobiles, Dollar Tree, and Toys R Us are all Limited Liability Company.

Disadvantages of a Limited Liability: It is a very complex system so it could be classified as a corporation, partnership or sole-proprietorship for taxes. The disadvantages of the other systems can be present in the Limited Liability Companies as well. Such as distrust, total consent, and complicated taxes.

Advantages of a Limited Liability Companies: There is no limit of the amount people in one of these companies. There is a lot of flexibility in this form of corporation. The taxes are paid individually by the owners.

Sole Proprietorship is when one person owns the business. That person is in charge of all business decision.

Examples of Sole Proprietorship: Catering Companies, a housecleaning service and a Landscaper. All three are examples because they are usually ran by one person with just a few employees.

Disadvantages to Sole Proprietorship: many times investors do not invest into a sole operations. Anything that happens in the business will be the fault of the owner since they have full control of the business. Also the owners of sole proprietorship have to take in the debts of the business that they own.

Advantages to Sole Proprietorship: the one person gets to make all decisions about the businesses by themselves. There is also no tax payments to corporate. There is also few legal costs to form a business as a sole proprietorship.

C-Corporation: this is a common type of corporation. It protects the starter of the corporation from being sued because of corporation.

Examples of a C Corporation: Adidas, 7-Eleven and ACME Communications are all examples of a C Corporation.

Disadvantages to a C Corporation: The corporation will have to file the Articles of Incorporation and will have to pay a file. They will be doubly taxed to the shareholders and at the corporate level.

Advantages to a C Corporation: Shareholders are not liable for debts and the shareholders might lose profit but will not have to pay the debt of the corporation. There is more funds which allow the business to get started. The corporation is separated from those who own the operations and who manages the business.

S-Corporations: these corporations are taxed like a a limited liability. It is created to avoid income tax.

Subtopic

Examples of An S Corporation: This can be involved in any corporation as long as it has less than one hundred shareholders. Home Depot and Walmart are examples of this.

Disadvantages to a S Corporation: The corporation will have to file the Articles of Incorporation. They will also have to pay a fee to start the corporation. The shareholders have voice in the management of the business.

Advantages to a S Corporation: only the shareholder level so there is no double taxation. The shareholders are not liable for the corporation debts. The shareholders will not be responsible if the corporations fail.