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Know the Business Structures
Seven of the types of business structures are main. A structure that helps a certain business to thrive may spell doom to another business hence the reason for different models. Rules and regulations relating to specific businesses vary. Read to the end and know these models but see home page.
The first one is sole proprietorship. The ownership of this type is a single person. Although the owner bears all risks and debts, it is very easy to start. Still, there is no selling of shares of the firm in the firm by the sole proprietor but consider this company.
The second one is the General Partnerships. There are several partners and this is the major distinction between this category and a sole proprietor. 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. If the business is set on an informal agreement, the partnerships always fall.
The Limited Liability Partnership is the other category but learn more. You will need paperwork and also legal fees while starting this type of partnership. This type has limited liability and other partners can join later. All general partners will share all debts and profits. This is the case with all legal liabilities.
The other category is the one referred to as the corporations. The owners of this one are the ones who own shares in the company. The running of the company will be defined by the shareholders. Profits are not equally shared but are shared as per shares held by individuals. Raising capital is easy since it only requires selling of shares. 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. Also, there are more taxes and legal fees meted on corporations.
The other type is the S Corporations. These are not the same as we know standard corporations. All loses and tax deductions are passed to the shareholders. There is also a cap of the number of shareholders. They however offer much protection to the shareholders.
The Limited Liability Companies are the other types of business. They have a recent structure. They have aspects of both partnerships and corporations. The owners pay income taxes on their profits.
However, the owners have a level of protection. If you run high risk businesses, this is the right type for you.
The other one is a Co-Op. The ones who run this one are members of a cooperative society. These are handy in providing services to the members.… Read More..