Legally there are multiple different kinds of business organizational structures that can be formed. Each has its own advantages and disadvantages. A few things are important to consider when deciding what type of business to form. The first one obviously being financing. Figure out how you are able to finance your business. Ultimately this will narrow down the paths you are able to take. Secondly, always consider the legal responsibilities that come along with each business organization. We have compiled a list below of a few popular business organizations to help get you started. We suggest you read the list below and thoroughly research to see what organization best suits you. Remember, the field of business is one of the toughest yet rewarding directions you can take. Choose wisely, and the future of your business is already on the right track!
Disadvantages and Advantages of Business Organizational Structures
In this type of business formation, you and you alone own this business. Therefore, you receive all of the profits made by the business aka you. Starting a sole proprietorship is easy; there is no paperwork involved! You have virtually all the control within the business and therefore determine hours and prices. As an added bonus is that a sole proprietorship only pays federal income taxes on the business’s profits.
You are liable for everything regarding this one of the business organizational structures. And I mean everything. As the business owner, you are responsible for any of the liabilities or losses incurred during the course and scope of your business. This is otherwise known as unlimited liability. In a lawsuit, nothing is off-limits here. In court, your assets are combined with the business assets. If the damages assigned to be awarded surpass your business’s assets your car or house are considered fair game.
Read here for more information on legal business organizational structures.