Your Business Structure and Corporate Business Structures Essay

Your Business Structure and Corporate Business Structures - Essay Example The decisions made are made the sole persons. (Resnicoff, 2006) The owner of the business may hire staffs to manage the business on his/her behalf. Sole proprietorship is the most available business. The first advantage of sole proprietorship is that is simple to form. It does not require a lot of formalities to form it. One can start it any time without following or filling legal formalities. The second advantage is that it is simple to manage. The owner of the business may find it easy to manage the business on his own. This reduces complications and follow-ups. It is also easy for a sole proprietorship to be sold or passed from one generation to the other. (Resnicoff, 2006) Thirdly, sole proprietorship has the tax advantage. A tax imposed on the sole proprietorship is based on the personal income. This means that the tax liability is less as compared to other forms of business. It is also easy to terminate the business. The owner of the business can terminate the business at his will. No legal formalities are required to end the business. (Resnicoff, 2006) One of the setbacks of sole proprietorship is that it is difficult to raise money. Financing institutions and banks are reluctant to fund a sole proprietor. It is also difficult for a person to get the fund from the government institution. This is a form whereby the two or more people with a common goal get into an agreement to run a business. The persons contribute money, and the profit is shared according to the agreed ratio or the contribution ratio. (Welsh, 2000) This form of business has several advantages. One of them is that it is easy for the partners to raise capital. Through their contribution, the partners can raise a lot of money easily. With partnership, taxes are not on the whole partnership but to the individual partners income. This makes the partnership have a tax advantage. The third advantage is, with different partners involved in the