Business Structure Advice Paper

Business Structure Advice Paper

It is with great pleasure to review your business options for starting your new business. Starting a new business can be challenging and I look forward to presenting you with all you options to structure your business. After presenting several business structures, I will recommend a structure that fits your organizational needs. Without specifying what type business you will start finding the correct structure may be a little tricky; however, there are some basic rules to follow and steps to take when starting a new business. It is my pleasure to review these steps and offer a recommendation to you.

Business Structures

The primary business structures of business are a sole proprietorship, partnership and incorporation. Within these structures we can breakdown the structure to include general partnership, and limited partnership which falls under “partnership” category, and “C” corporation and “S” corporation under the incorporation option. Please note we will review each structure with the basic steps for starting your business and determine the best fit for your company.

Sole Proprietorship

“To start a sole proprietorship, the only requirement is he owner will need to obtain a business license required by the individual local and state governments” (Parrion, Kidwell, & Bates, 2012). This particular structure falls at the top of the list because it is the easiest of the structures to establish and will cost the least amount of money. The advantages of a sole proprietorship is the owner has the sole responsibility for all decisions with freedom run and collect the profits made by the company. The disadvantage of the structure is you must secure you own financing and your personal credit score is used to determine your financing from outside sources. Please note as the owner you alone handle any debt or obligations that the business incurs and your personal assets will be at risk.

Partnership

The second business structure is a partnership; with this choice there are two options to consider. General partnership (management decisions and profits are shared according to investments, but liability is shared equally regardless of the investments) and secondly, limited partnerships (which includes both general and limited partners). This structure is more complex and costly than a sole proprietorship. The drawback to this choice is the life of the partnership is flexible because if a partner leaves the company,