Fin 571 Week 1

FIN 571 WEEK 1

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FIN 571 Week 1

In advising, what type of business structure to partake on, one has many options to consider when deciding to start a new business venture. The business structures that has to be identified and determined which is suitable for the individual or individuals are the Sole Proprietorship, Partnership and the Corporate structure and also the Sub Chapter S Corp and the Limited Liability business structure. Each of these structures have particular advantages and disadvantages that are associated with them, that needs to be addressed and identified

The Sole Proprietorship structure is an individually owned and managed. This business structure is the least regulated out of the different structures and the costly to form. The owner of this business structure has complete control and has a simplified tax structure to adhere to. A major disadvantage of the Sole proprietorship business structure is that income is reported as individual income .Also another disadvantage with Sole proprietorship business structures are that the owners amount of personal liability for the business, and that banks are more reluctant in providing loans for this type of business structure because of a perception that the business will have the ability to repay the loan if the business fails. Because of the inability of this business structure to issue or sale stock, investors are often hesitant to invest in this business form (U.S. Small Business Administration , 2014).

The Partnership business structure consists of two or more people that share in the operation and development of the business. Each individual owns and share in the proceeds of the partnership. The advantages of the Partnership structure are that partners share and contribute to the different needs of the business, which include the talents and...