There are 3 common forms of a business structure. When deciding on beginning a business, you must consider these 3 forms and analyze them according to the type of business you would like to open. In this paper, we are going to consider that you and your classmate wish to start a business together selling candies and baked goods prior to and during breaks between scheduled classes on school grounds. We will analyze all three major forms of business structures to find the one that would be the most effective with this business.
You and your classmate wish to start a business together selling candies and baked goods prior to and during the breaks between scheduled classes on school grounds. Before making this ...view middle of the document...
There are three common forms of a business structure. A sole proprietorship is the most informal of the three common forms. In a sole proprietorship, the owner(s) are in complete control of the business. The owner of the proprietorship is personally liable for all losses incurred by the proprietorship. (Kubasek, Brennan, and Browne, 2009) A general partnership requires an agreement between two or more individuals to jointly own and operate a business. (U.S. Small Business Association, 2010) This type of partnership would generally be the easiest to form because it is the least expensive of the three. Everything is split down the middle in this business structure. A corporation is the business structure that is most prominent in the United States. It is owned by a group of people but is treated like a single entity. Most corporations are financed by taking out loans. In this particular business structure, you have a number of people who have a say-so in the every aspect of the organization.
When deciding on which business structure is best for the scenario above, you must look at all aspects of the type of business you want to open. With regards to the scenario above, a general partnership would be the most effective business structure. You and your classmate can split everything down the middle as far as supplies, production, and profits.
Kubasek, Brennan, & Browne (2009). The Legal Environment of Business: A Critical Thinking Approach. Upper Saddle River, NJ: Pearson Prentice Hall.
U.S. Small Business Administration (2010).Programs and services to help you start, grow, and succeed. Retrieved April 16, 2010 from