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Bussiness Structures

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Business Structures jhjh FIN/571
Jan 25,2015
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Business Structures
There are many forms of business structures suitable for different kind of business. Business owners should chose the most appropriate business structure that is most suitable for their needs.
Sole Proprietorship is most easy to form and less costly business structure. In this business structure, single person has complete rights to make all management decisions and receive business profits. Access to funding the company is limited to personal assets. The owner is legally responsible for the business contracts.
Partnership is business structure having more than one owner. Partnership increasese the diversity of the business and also brings in more capital into the business. Profit is shared among the partners. There is less flexibility and freedom to make management decisions. Partners need to reach consensus to reach management decision. General partners are liable for the debt and obligation of the partnership.
In a Limited Liability Company, General partners and limited partners are not personally liable for the debts and obligations. Individuals in partnership can file personal income taxes, self employment taxes based on their contribution to the partnership. Provides flexibility in business ownership with partners deciding on their own contribution to business operations. Individual partners are not obligated to consult with other partners in certain business agreements.
General Corporation exists as a separate legal entity. Corporation can deduct the cost of benefits (benefits package) that offers to its managers and employees. Corporations can obtain more capital through the sale of their actions. Shareholders own corporations and the personal assets are protected. The shareholders have limited responsibility with respect to the debts or trials against the corporation. The

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