Business Research
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- Date Submitted: 12/22/2014 08:30 AM
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Business Structure Advice
Sheri Johnson
FIN/571
December 8, 2014
Hillman Lo
Business Structure Advice
Dear Mr. John Owner, I appreciate you reaching out for advice during this exciting time in your life and would be glad to help you through your journey of starting a business. We will look at several options for you and go over their advantages and disadvantages.
In order to start forming your business, you must have a business plan. This plan will detail your vision and mission for the business along with how you plan to achieve the goals to make it a success. Along with the business plan, you must detail how you will finance your business initially and projected growth rates over a period of time.
There are three types of businesses to consider based on what information you have provided me. They would be: Sole Proprietorship, General Partnership and Corporation. “A Sole Proprietorship is one individual or married couple in business alone. Sole proprietorships are the most common form of business structure. This type of business is simple to form and operate, and may enjoy greater flexibility of management, fewer legal controls, and fewer taxes. However, the business owner is personally liable for all debts incurred by the business.” (http://bls.dor.wa.gov/ownershipstructures.aspx) The advantages of a Sole Proprietorship would be that you have complete control over the business, no corporate tax payments and minimal legal fees to form. The disadvantages would be that you could be held personally liable for the debts of the business. “A General Partnership is composed of 2 or more persons (usually not a married couple) who agree to contribute money, labor, or skill to a business. Each partner shares the profits, losses, and management of the business, and each partner is personally and equally liable for debts of the partnership. Formal terms of the partnership are usually contained in a written partnership agreement”....
Sheri Johnson
FIN/571
December 8, 2014
Hillman Lo
Business Structure Advice
Dear Mr. John Owner, I appreciate you reaching out for advice during this exciting time in your life and would be glad to help you through your journey of starting a business. We will look at several options for you and go over their advantages and disadvantages.
In order to start forming your business, you must have a business plan. This plan will detail your vision and mission for the business along with how you plan to achieve the goals to make it a success. Along with the business plan, you must detail how you will finance your business initially and projected growth rates over a period of time.
There are three types of businesses to consider based on what information you have provided me. They would be: Sole Proprietorship, General Partnership and Corporation. “A Sole Proprietorship is one individual or married couple in business alone. Sole proprietorships are the most common form of business structure. This type of business is simple to form and operate, and may enjoy greater flexibility of management, fewer legal controls, and fewer taxes. However, the business owner is personally liable for all debts incurred by the business.” (http://bls.dor.wa.gov/ownershipstructures.aspx) The advantages of a Sole Proprietorship would be that you have complete control over the business, no corporate tax payments and minimal legal fees to form. The disadvantages would be that you could be held personally liable for the debts of the business. “A General Partnership is composed of 2 or more persons (usually not a married couple) who agree to contribute money, labor, or skill to a business. Each partner shares the profits, losses, and management of the business, and each partner is personally and equally liable for debts of the partnership. Formal terms of the partnership are usually contained in a written partnership agreement”....