Choosing A Suitable Business Structure

The below table compares and contrasts business structures on the basis of the most common issues, naming: taxation, liability, risk and control, continuity of existence, transferability and expense and formality (Quickmba, n.d.). Also, you will notice that in the table the similarities are extended from one structure to the other, while differences are kept in separate cells.

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.

For this assignment my task is to choose two contrasting businesses within the Borough of Newham and describe the type of businesses, purpose and ownership. One has to be a large profit making business, like PLC or Ltd, and the other a small business, profit, not-for-profit, sole trader, partnership or small ltd. For the first business, I have chosen one of the largest retail in the world, Tesco PLC, and for the second I have chosen the charitable organization, Cancer Research UK, that is a not-for-profit business.

When it comes to partnerships Alex, Bill, Carl, and Devon will have two options- a general partnership or a limited partnership. Partnerships are beginning to be a business form of the past. Once upon a time, partnerships were “the default form of business and provided the benefit of pass-through taxation, but lacked the important feature of limited liability” (Chrisman, 2010, p. 465). In a general partnership, each partner associated with the entity will be held liable for their own business decisions as well as

The benefits of Partnership Company are that business is anything but difficult to build up and start-up expenses are low. There is more capital accessible for the business. Workers that are of high-bore are made accomplices. The burdens are that the obligation of the accomplices for the obligations of the business is boundless . There is additionally danger of differences and contact among accomplices and administration. Every accomplice is an agent of the partnership and is at risk for activities by different accomplices. This means that it brothers choose this type, they will be responsible for each other’s action irrespective of the fact whether they like it or

The partnership is a form of business that could be possible in Shania’s scenario due to the other individuals showing interest in the business idea. She can create a partnership with one or more persons and sharing of the profits is divided equally, unless an agreement states otherwise (Kubasek, et al., 2015, p. 423). Some of the benefits of a partnership are the ability to raise more capital and to share ownership responsibilities (Block, et al., 2015, p. 9). With committed partners it is possible to have a successful partnership.

Our business is a partnership type of business because it’s owned by two people. Through our partnership, we will increase the level of our business, making decisions and implementation of changes can be fast, and we cover each other for holidays and

Another business structure to establish is Limited Partnership, which is similar to the partnership with a slight difference where it formed with at least one general partner and one limited partner. The general partners have the same obligation as partners in a general partnership; however, limited partners have limited liability to the extent of their contribution. The advantage of this business formation is the limited personal liability for individual partners for the acts of another partner within the organization. It has the same tax consequences as a general partnership. One important positive aspect is management and control aspects of the organization could be divided or separated among partners. It’s shortcoming, a general partner is still personally fully liable for the debts of the business. If the limited partner wants to become active in the business, he/she may assume the personal liability obligation.

A Partnership is a business form that consists of two or more individuals. There are two types of partnerships; general and limited. General partners are liable for the full extent of debts and obligations within the business. Limited partnerships provide individuals with a limitation of responsibilities in the organization’s liability; this type of partnership is dependent upon the investment percentage. Advantages of partnerships consist of cost efficiency, shared financial responsibility, complementary skill association, and offer employees partnership incentives. Disadvantages of partnerships are joint and individual liability, disagreements between partners, and shared profits (“U.S. Small Business Administration,” 2013).

They can also form a partnership, which is a type of business in which co-owners share the costs and work together to attract customers. As general partners, they would manage the business together and share profits, debts, and obligations associated with it. If Helena and Francine form a limited partnership, they could bring in other limited partners who help fund the

Again in everything there are pros and cons. The pros to a partnership is that obtaining a partner is easy, when there is more than one owner this increases financial stability allowing each partner to contribute funds and potentially increase their borrowing capacity. Depending on the business and its need for additional partners this could increase employee retention because employees will see an opportunity to one day be a partner.

Formation of a partnership and the formation of a corporation have varying procedures and difficulties associated with them.

Considering, small amount or lack of sufficient fund with my client, I will like to advise him that sole proprietorship business might not be good and appropriate and thus, I Would like to suggest him to form a partnership business. As we know that Businesses operating as an Sole proprietorship business is beneficial for the full control over the business structures such as in management, decision making etc, but in this scenario It seems that as per the clent funds its not well worth for

Furthermore, both parties entered into a shared business partnership. Justice Dixon in a judgement discussed a partner relationship as “a stronger case of fiduciary relationship… ‘Their mutual confidence is the lifeblood of the concern. It is because they trust one another that they are partners in the first instance; it is because they continue to trust one another that the business goes on’ … The relation is based, in some degree, upon a mutual confidence that the partners will engage in some particular kind of activity or transaction for the joint advantage only. In some degree, it arises from the very fact that they are associated for such a common end and are agents for one another in its accomplishment.” The culmination of friendship and the above considerations by Justice Dixon strengths that fact that the relationship in its totality is one that equity would assign as a fiduciary

Sole proprietorship was precluded because the business will be run by Monica and Susan because they have the necessary skills to be successful entrepreneurs. In this scenario, Vic will provide capital and will take a passive role in managing the business, she sill obtain profits because of her involvement in the business. For not facing some problems among them, they will have to reach an agreement generally written to state how shares will be handled; this is common called a limited partnership agreement. “This agreement sets forth the rights and duties of the general and limited partners; the terms and conditions regarding the operations, termination, and dissolution of the partnership; and so on” (Henry Cheeseman, 210, p. 547).