Business Structures Essay Example | Topics and Well Written Essays - 500 words

Business Structures - Essay Example Sole proprietorship is a business structure run by one person. As such, the major advantages of a sole proprietorship are that the owner has full control of the business and does not share the profits with anyone. This type of business structure is also advantageous since decision making is faster as the owner makes all the decisions affecting the business without having to get anyone’s approval. Additionally, sole proprietorship is the simplest business venture to start as there are not many legal requirements. Nevertheless, sole proprietorships also have certain disadvantages, which a business entrepreneur must consider. Firstly, the sole proprietor bears all the liabilities of the business, which is disadvantageous. Additionally, raising capital for business expansion may be difficult. Partnership is a business structure formed by two or more individuals. A partnership may come in two forms: general and unlimited liability. Limited liability partnership is that which protects owners from liabilities arising out of the business failure. In this regard, in case a business fails, limited liability partners are only liable to the creditors to the extent of the capital contributed. This implies that creditors cannot claim the private properties of the partners in case of business failure, which is advantageous. Secondly, partnerships are advantageous in that management is shared among all partners. Thirdly, partners are only taxed personal earnings. Additionally, partnerships are advantageous since it is easy to raise capital for business expansion as each member ploughs in capital in the business. Partnerships are, however, disadvantageous since profits are shared among partners. Secondly, decision making might be time consuming due to differences in opinions among pa rtners (Films for Humanities & Sciences, 2011). The video also discusses quite a number of corporate structures, including general corporations, subchapter S