Business Structures before strating Business

           Before starting the business, everyone should have to know about the business structures and have to get the basic knowledge of these structures what are the key points and how they work including positive and negative things of structures. After getting the basic or intermediate level of information, what kind of business entity structure must be established?  The type of business entity structures is used to determine which income tax has been returning from you and the paperwork has been filed regarding your taxes. The most commonly used business structures are mentioned below:

Sole proprietorship structure

Partnership structure

Corporation structure

Limited liability company (LLC) structure

To go further by selecting I want to give you some information about all the business structures. I will just give you a highlighted overview of each structure which will be very helpful for understanding.

The Sole proprietorship Business Structures  

        The sole proprietorship business structure is the most commonly used entity structure which is owned and operated by the only person. If any person wants the full-fledged control on your business then sole proprietorship must be a good option for him. Remember one thing, it does not generate the different business entity structure and your business assets, resources and liabilities will not be separated. Business expenses and personal income of the business are included in the personal tax return (CARRASCO & HEIBERG, 2017).

Advantages of Business Entity Structures

Formation of a sole proprietorship is too easy and the owner of the company enjoys the control on the profit in business.

Owner the business can make important decisions and is responsible for all-day activities.

The owner will get the whole income of the proposed business.

Taxed profits could be earned as personal income, therefore, the owner does not any need to pay the income taxes.

Disadvantages of Business Entity Structures

The proposed strategy is not suitable for every person.

The owner will have to perform all the responsibilities if he fails then business growth will below.

Proprietors have to bear an unlimited amount of liabilities.

Partnerships of Entity Business

The partnerships entity business that will be run by two or more people can run and raise an investment based on percentages in the form of giving services, time and money and operate their business together. Partnerships could be considered as the limited or general partnerships which mean that partnership can be just for the particular time. Partnership has two further branches like

General partnership

Limited partnership

General partnership of Entity Business

        The general partnership will be owned by two or more people. In Simple words, the partners of regarding business have to manage the business and assume responsibilities for each partnership’s debts (that partner which has no personal assets) and one more thing has to know about all partners have to divide equal shares of all the profits and losses. This type of partnership allows partners to do work as the co-owner of the business and consider it that partners shares in business should be in the written form.

Limited partnership of Entity Business

        The Limited partnership consists of both limited and general partners. For making this kind of partnerships, you must need at least one general partner and one limited partner to start a limited partnership. This kind of partnership will not go longer. Partners just want their higher profits from the business want it to grow more. In simple words, limited partners are just the investors of the company and they have no rights to make a business decision. Only General partners of the business have the rights to make the decisions and they will operate the business while the limited partners of the business like to take the ownership of without taking any responsibility and risks too.

Advantages and disadvantages of Entity Business

Every partner will have to pay or invest the amount of cash

They have a show and pay contributions to the business

But the profit will be divided

Have to bear liabilities equally.

The chances of dissolving the partnership are too high.

Corporation entity Business

        Corporation entity structure is separated from its owners. Corporations follow the laws and make totally legalize the businesses. It also provided complete protection regarding personal liabilities. Therefore, the corporation is much more complicated beyond the other business structures. If any person wants to expand the business to the other segments of the market and want to add up the more shareholders then he should go with that. The corporation is double-taxed because they have to pay double tax. Double taxation comes into shape when you have paid the income taxes twice against your same income of source of earned income. A company should be considered as the taxpayer as a business entity and every shareholder’s personal income will be taxed in a particular case.

Limited Liabilities Company (LLC)

        Limited liabilities company is based on the US-specific form of a private limited company that shows the business structure and it combines the pass-through taxations of the partnership, a sole proprietorship with the particular the limited liabilities of any corporation. It is a legal form of r company but is it not a corporation under any laws of the state (Dummies, 2014).

    A limited liability company will give you an advantage of the sole proprietorship, corporation entity and the partnership entity business structures which makes itself the most flexible structure. Only LLC will provide you very flexible business structures and it will separate the other businesses and liabilities. All the owner of the business who does use the limited liability company structure has to share the tax responsibilities.

    A limited liability company does also provide liability protection like corporations without using paying or considered as double-taxed to the owner of the company that is using limited liabilities company. You can pass through the proposed taxes whenever your business starts to avoid the double corporate taxation for the personal income level. According to other business structures, the owners of the company or a business in limited liabilities company are not really liable for their business debts (Dummies, 2014).

    In short, the Limited Liability Company has a limited life in many states. It is highly required you to dissolve or recreate the owner’s limited liabilities Company for your state if any person or employee of the company joins or leaves the specific company. There are many states exists there and every state will treat your limited liability company entity designs in the very different manners, so for that purpose, you need to keep an eye on the tax liabilities and it varies depending on the locations. Just you have to check your limited liability company entity structure and regulations for growing my business.

Advantages and disadvantages of Entity Business

Abandon together all talented individuals but earlier partners are subjected as an unlimited amount of liabilities.

Easiness in financing but people are not comfortable.

The business will be run and depends on the number of individuals and the disagreement ratio is too high.

 Choosing My Business Structure

   At the time of selecting a business structure for my business, the first thing I need to assure that the proposed structure will provide me the most benefits and will also provide the structure for the small business.

  The first thing I need to sure what business structures I going to follow. It should do provides me the facilities as other legal business companies can do, so just be sure your chosen structure will be legalized.

  How much cost it does require and also be sure that will it generate the targeted revenue to grow my business?

It should be flexible

Should also business future needs.

References of Entity Business

CARRASCO, A. G., & HEIBERG, L. M. (2017). BUSINESS ENTITY-RELATIONSHIP MODEL: FOR INNOVATION, ENTREPRENEURSHIP, AND MANAGEMENT. Alberto Gonzalez Carrasco & Luis Müller Heiberg.

Dummies, L. L. (2014). Jennifer Routing. John Wiley & Sons.