Business Structures
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Business Structures
Business Structures
Developing an effective business plan is an essential component for a successful financial overview of a company. The business plan includes a brief description of the company, the marketing section, the financial management portion, and the goals and plans of the business. The purpose of the business plan is to illustrate a blueprint of the desired direction of the company for forecast purposes, as well as financial support as needed. Upon requests for financial support such as loans or grants, investment companies are interested in the business plan set forth for the company. Shareholders participate as business owners once the business structure is identified for the organization. The structure of the business determines the legal classification of the company. A company can either be a corporation, a partnership, or a sole proprietorship.
Having protection from creditors, unlimited numbers of stock ownership and several owners at once is an advantage of a corporation. General corporations are common business entities that do not affect an individuals' personal assets and liabilities. According to Planning Your Business, "you can have an unlimited number of stockholders, and they are protected from the business' predators" (Planning Your Business: Research, Goals, and Business Plans, 2011). There is also the Subchapter S Corporation. This corporation provides tax savings, expense tax credit, and independent life of the company. The disadvantage of the S-Corp is that it demands stricter operation process; shareholders must also be compensated. However, the advantage to establishing an S-Corp continues with the ability to have tax savings, or a special IRS status. A limited liability corporation is also a business structure.
The advantage to a Limited Liability Corp is that there is some protection for entrepreneurs that is similar to the advantages of a general corporation, and it is easy to obtain. An LLC has...
Business Structures
Developing an effective business plan is an essential component for a successful financial overview of a company. The business plan includes a brief description of the company, the marketing section, the financial management portion, and the goals and plans of the business. The purpose of the business plan is to illustrate a blueprint of the desired direction of the company for forecast purposes, as well as financial support as needed. Upon requests for financial support such as loans or grants, investment companies are interested in the business plan set forth for the company. Shareholders participate as business owners once the business structure is identified for the organization. The structure of the business determines the legal classification of the company. A company can either be a corporation, a partnership, or a sole proprietorship.
Having protection from creditors, unlimited numbers of stock ownership and several owners at once is an advantage of a corporation. General corporations are common business entities that do not affect an individuals' personal assets and liabilities. According to Planning Your Business, "you can have an unlimited number of stockholders, and they are protected from the business' predators" (Planning Your Business: Research, Goals, and Business Plans, 2011). There is also the Subchapter S Corporation. This corporation provides tax savings, expense tax credit, and independent life of the company. The disadvantage of the S-Corp is that it demands stricter operation process; shareholders must also be compensated. However, the advantage to establishing an S-Corp continues with the ability to have tax savings, or a special IRS status. A limited liability corporation is also a business structure.
The advantage to a Limited Liability Corp is that there is some protection for entrepreneurs that is similar to the advantages of a general corporation, and it is easy to obtain. An LLC has...