Different Types Of Business Structure Of A Start-Up Company

A sole proprietorship is a form of business that is owned by a single individual.  • Liability – Due to the lack of legal distinction between the owner and the business, the owner is fully responsible and liable for all debts that the business incurs in the same manner that an individual is fully responsible and liable for all debts that they incur. There is no legal distinction between the assets of the owner of the sole proprietorship and the business; this means that creditors have the ability to come after the owner’s business and personal material assets.   Income Taxes – Since the business is the same as the owner of the sole proprietorship, all profits or losses from the business are filed by the

We understand that you own the rights to technology that has the potential to change the future and want to start your own company. We also understand the conditions that you want to do it under. Based on the capital that you have and the description of how you want to develop your company we have concluded that these four options would be suggested to suit your company structure:

Sole trader is where a business is run as an individual; so that all profits are their own after tax has been paid on them. Within a sole trader organisation it is possible to employ staff, as the sole trader only means that you own the business personally and do not actually have to work by yourself.

Sole Proprietorship is a business owned by one person, as distinguished from a partnership or

Sole traders have unlimited liabilities,meaning that in terms of law there is no separation between them,hence the sole trader is also liable for the debts incurred within the business, which makes it very risky to run for a long-term.

The sole proprietorship is a business which is owned and managed by one individual. Some of its advantages are, the ease of formation, its management control, and its distribution of profits. Some of the disadvantages are, its unlimited liability, the lack of continuity, the capital requirements.

The sole proprietorship is the simplest form of business organization. A sole proprietorship is a business that is owned by an individual who is solely responsible for all aspects of the business. The owner is personally responsible for all debts of the business, even in excess of the amount invested. The business and its owner are thus considered the same entity.

Disadvantages of Partnership: Owners of partnerships are held responsible for all company debts and legal responsibilities, and are subject to losing personal assets if the company is caught up in costly legal situations or goes bankrupt.

Therefore, based on what the business is delivering to its customers, the organisation can have any of a group of structures, for example:

Choosing the appropriate structure of the business practice is a complex exercise and a whole range of factors need to be analysed. One must not only analyses current circumstances, but also consider the future plans and the effect of the business structure on these future plans. Following is the brief overview of the factors which should be considered before finalising the business structure.

Sole proprietorship is an independent business owned by one individual. Sole proprietorship businesses are relatively small and in most cases the financial resources of one person are adequate to cover operational expenditure.

Sole traders consists of only one person running the business who has unlimited liability and 100 percent of the shares of the company.

However, there are disadvantages of having a partnership structure for a business. The biggest problem of a partnership is the decision making that is involved during a meeting. Most of the times, partners disagrees with each other and will ultimately lead to arguments and personal conflict. Additionally, when a partner makes a mistake and creates a problem for the business, each partner is involved with all the debts and liabilities. This is a disadvantage for you and the partners because you have to pay for a mistake a partner did and it could be at any value.

Sole Proprietorship is the least complex form of business that a person can operate a business under. This form of business is not legally set up. Sole Proprietorship means that the owner and the business are the same. In a Sole Proprietorship, the owner can either operate under their own name name or they can also operate under a fake name or d.b.a. filing. The 7 key characteristics of a Sole Proprietorship are:

There are also many disadvantages of Partnerships. In partnerships, sometimes partners disagree and when they disagree it may be a problem for business. For instance, there may be disagreements as one may feel has more control of the business because of his large contribution. That is why there is a need for a deed of partnership before venturing into any business agreements. The other disadvantage is that partnerships have unlimited liability this means each general partner is liable for the debts of the firm no matter who was responsible for causing those debts. Division of profits also means that partners may as well share risks general partners can lose their personal properties and everything else they own if a business goes bankrupt or loses any lawsuit. Partnerships are also difficult to terminate- Once one has committed himself to the partnership, it is not easy to get out of it except through death which leads to automatic termination of the