Some Business Structures to Think About
Seven of the types of business structures are main. The reason for the existence of several models is that businesses thrive at different models. There is a variation as pertains to rules in a particular business. Read to the end and know these models but see home page.
The first one happens to be the sole proprietorship but see page. The ownership of this type is a single person. The starting of this type of business is easy but the owner bears all the risks. A sole a sole proprietor cannot sell shares.
The second one is the General Partnerships. The main difference between this category and a sole proprietor is that this one has several partners. Losses and profits are shared by all partners but consider this service. The number of partners begins at two but having many of them delays decision making. One of the pitfalls to avoid in these is starting a business without a formal agreement.
There is another category called the Limited Liability Partnership. This type of partnership must be accompanied with some paperwork as well as legal fees when setting up. Other partners are free to join later and the liability is limited. All debts and profits in this one are shared by all general partners. Also all legal liabilities are thus shared.
The other category is the one referred to as the corporations. A corporations is owned by those who own shares in a company. The shareholders are the ones who run the company in all aspects. The number of shares an individual has will dictate the proportion of profits they will receive. Shares can be sold if the company wants to raise capital. Also, banks will willingly give loans to corporations. Also, corporations do not have personal liability. Due to the complex structure, it is very hard to make decisions in corporations. When it comes to taxes and legal fees, corporations will pay more.
The other type is the S Corporations. They are not the same as the standard Corporations. The shareholders will bear all the losses and tax deductions. Again, the shareholders cannot be more than 100. However, there is a very high degree of protection that the shareholders will enjoy.
There are also the Limited Liability Companies. The business structure in this one is recent. There is a merging of the aspects of partnerships and corporations. The owners pay income taxes on their profits.
However, the owners have a level of protection. This is the best category for those who run high risk businesses.
A Co-Op is the other type of structure but learn more. members of a cooperative society are the ones legible to run this type but check it out. The members benefit since they are provided with services.