Business Structure Advice Essay Example | Topics and Well Written Essays - 500 words

Business Structure Advice - Essay Example Companies are large corporations with a huge composition of members and partners. They have complex legal requirements and not suitable first time ventures. In addition, their creation requires large financial resources and is exposed to numerous business risks (Besley & Brigham, 2008). This makes it a bad business venture for an amateur business creation. Sole proprietorships are less complex corporations. Their formation requires only the existence of the owner. In this form of business, the owner may receive aid from family members. This form of business is preferred for a first venture if the owner has enough resources or can receive financial aid enough to create a business venture (Besley & Brigham, 2008). In regards to taxation, a sole proprietorship is only taxed on the business venture. A person’s personal properties are not liable for taxation. However, the business venture is mandated to pay an annual tax for its operations (Besley & Brigham, 2008). Partnerships, on the other hand, are business ventures created with the collaboration of two or more persons. They are referred to as partners. They are easy to create as a person may seek a partnership from a person or persons who share similar business incentives (Besley & Brigham, 2008). The main advantage of this business form is that the capital contribution is shared among partners. In addition, operations are divided among the partners. This makes it easy to operate. In a situation where a person lacks enough capital and business knowledge, a partnership is the most appropriate business venture (Besley & Brigham, 2008). Taxation in partnerships is only liable on the business. However, the tax to be paid by the business is shared among the partners. In addition, personal properties are not taxed on the behalf of the business. In regards to capital generation, a business may have numerous options to consider. One possible way of capital