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Structures of Business

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Abstract
As her first investigation into business studies, this author will explain her take on the different kinds of business entities. The three different kinds of entities are: Sole-Proprietorship, Partnership, and Corporation. She will then take the information given to her and make a decision on the scenario given to her. The scenario states that she is an inventor with no financial or management skills but would like to bring her product out in the world, out of the three business entities, which one should she pursue?

Structures of Business As businesses come and go, there are three main entities that got them started, Sole-Proprietorship, General Partnership, and Corporation. I will be explaining the three entities as well as comparing them, as a positive outlook and also a negative outlook. I will then explain why I chose General Partnership as my choice of starting the business stated in my scenario.
First I will be explaining Sole-Proprietorship. As defined by Dion (2005), “Sole Proprietorship is simply an unincorporated individual starting a practice, with assets he or she owns in his or her own name alone.” In other words, someone who starts his or her own business by themselves and anything that becomes successful will be their own profit. Although they will be acting alone for their profits, they must understand they are going to be liable in every way during their road to success. This entity would probably be the easiest to handle because if the person who owns that business wanted to transfer his business to someone else, it would be a lot easier to transfer then the other two entities. Although, if the business isn’t transferred and the owner is deceased, the business might die with him or her and sometimes it becomes the worst choice.
The next business entity I will be explaining is General Partnership. General Partnership as explained by Dion (2005) “Is simply an association of two or more unincorporated practitioners who conduct business as a joint venture.” This basically states that it’s similar to a Sole-Proprietorship, but, instead of one person leading the business, it is owned by two or more people. This entity is my choice for my scenario which I will get into later in this report. The Partnership business entity is best suited for business owners that may not have the proper skills (e.g. financial skills) whereas their partner has a lot of experience in the financial business. Although this might be the better choice there are a few downsides to having a partner. There is a chance of unlimited liability meaning one partner may be liable for their partners’ debt or misdoing. Another downfall would be if one partner were to die or forfeit themselves out of the business, the other partner would be stuck and unable to transfer the business due to not having an agreement with the other partner. Even though partnerships seem to be a tough choice there are benefits in which the business could succeed such as expanding the business, finding new talents to help the business grow, and also find it easy to invest in that company.
Lastly, Corporation, one of the business entities I feel is one of the biggest and far more successful in this day and age. Corporation as described by Ebert, R.J., & Griffin, R. W. (2005) “Business that is legally considered an entity separate from its owners and is liable for its own debts; owners’ liabilities extend to the limits of their own investments.” In other words, a Corporation is basically a company that is apart from their owners where other people buy their stock or shares and they are only liable to however much they invest in the company. Some of the benefits of being in a Corporation are that the life of the company or business can be held practically forever due to the shares of stock being passed down by the person that invests in that company. The expansion of investors are also a great benefit because if you sell more stocks the more people that are willing to purchase and more money your company gets. There is also a downside to Corporations and one that I believe hits hardest is the chance that it could always be taken over by another company without any managerial consent.
The scenario states that I am an inventor who made a new product and would like to put it out in the market. With my research, I have concluded that I would go into a Partnership for my product because I could find a partner who will level out with what I don’t have, management and financial skills. Also, as a partnership we could find ways to invest our money together and work hand in hand with building the business. Although we may not agree on everything, I am pretty sure that we can find ways to compromise and work it out. Even though the downsides of Partnership, the risk of continuity of the business and also the liabilities that we may face, I am willing to take the risk because that is what business is all about, taking risks and being successful.

References
Ebert, R.J., & Griffin, R. W. (2005), Business Essentials, Upper Saddle River, NJ: Pearson Prentice Hall.
Dion, Justin H. (2005), Business West,

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