The Business Structures Of The United States

1729 Words7 Pages
Since the beginning of time, mankind has always had some form of trade. It started off as bartering and trade of general goods and slowly progressed over time. Different forms of specialized trade arose over time such as the trade of salt within Africa among Trans-Saharan trade routes and the large fur-trade market in northern Missouri that flourished throughout the span of the seventeenth century. Today within the United States there is a market economy that has thrived as a successful form of free trade in which the producers and the consumers of various products determine how the market will progress. All of this has lead to the modern day business structures which are utilized by all producers in order to obtain a successful and…show more content…
All profits belong to the owner of the business in addition to all debts, losses, and liabilities (Small Business Association). In order to form a sole proprietorship, a business owner must simply begin practicing their business. There are no legal or formal actions required to form a sole proprietorship (Malinak). In order to sustain, such a structure, one must obtain the correct licenses and permits. These are obtained by meeting legal requirements set by the state and local government for the applicable industry (Bloomsbury). When one is considering different business structures, they must also consider the taxation methods of the various structures, as these methods vary. In a sole proprietorship, the business is not taxed as a separate entity from the owner of the business as they are considered to be the same being (Small Business Association). Now that all of the information has been gathered on this structure, it is imperative to evaluate the advantages and the disadvantages of this model. The advantages of a sole proprietorship are simple and low-cost formation of the structure, complete control of business by sole owner, and low tax rates. Some disadvantages of a sole proprietorship would include complete personal liability and the difficulty of running a business as the lone owner and employee (Bloomsbury). Another popular business structure is the partnership structure. Although partnerships are not as
Open Document