Business Structures; Advantages and Disadvantages

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Business Structures Paper Finance/571 August 5, 2013 Business Structures Entrepreneurship is an excellent opportunity for individuals seeking the independence of running their own business. Starting a business can be a quite daunting task for anyone who is looking to do so. Potential business owners must be ready to invest much of their time and energy to the planning and startup phases of their business. Those activities include conducting research, creating a business plan, securing financing and marketing. Additionally, business owners also have to decide the type of business form that they would like to operate under. There are three main business structures in which entrepreneurs must establish their business.…show more content…
At times, individuals with similar business interest may form a partnership in order share responsibility and resources in operating a business. On the other hand, a partnership can be formed where one individual is solely a financial partner, while the other may be an operating partner. Partnerships come with their advantages and disadvantages as well. The advantages of partnerships are they are easy to establish, combines the skills and resources of two or more people and increases the ability to raise funding for the business. The disadvantages of partnerships are; profits must be shared, increased possibility of conflict, interdependence of decision making and unlimited liability. Regardless of the arrangement, partnerships are an excellent opportunity for individuals to join together and use their resources, finances and talent to create a successful business. Corporations Corporations are the third and most complex form of all the business structures. Corporations are the most familiar forms of business within the United States. Over 75% of business conducted within the U.S. is with corporations. The three types of corporations are General, S-Corp, and LLC. Corporations are the most complicated of the three based on the various levels of operation and extensive ownership of the companies. Although corporations are complex, they bear many advantages over the other forms of business. These advantages include the ability to raise massive
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