Legal Structure of Business

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Category: Business and Industry

Date Submitted: 09/13/2012 10:09 PM

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Starting a business is a challenging yet rewarding activity that every business man undergoes because of the several factors that need to consider like the available time establishing and operating a business, the commitment you’re going to have in achieving business’ goals, limited resources which should be analyzed carefully. Aside from the financial and operational dilemma that may encounter when doing a business, various legal aspects such as business legal system, taxation, labor code, and others are also to be considered. Deciding on the right legal structure for a business indeed a helpful planning activity that enables the business to work efficiently. And to help me analyze and determine the best business or legal structure for my future business, let me discuss first distinction of each structure from one another.

Firstly, the sole proprietorship, this is the most common and simplest form of business organization. Sole proprietorships are owned by one person who is generally also responsible for the business’s day-to-day operational responsibilities. Sole proprietors operate in many different capacities, including full and part-time businesses, individually run businesses or those with employees, and traditional, home-based, or online businesses in all different industries. Sole proprietors do not run their operations through separate legal entities. They can sell goods or services; they can also be self-employed freelancers, independent contractors and consultants who provide their services to other businesses. With this form of business, you can establish a business with a very minimal amount of capital. This form of business is also the easiest way to register legally through the Department of Trade and Industry (DTI) and reservation of certificate of registration (COR) and TIN at the Bureau of Internal Revenue (BIR).

When it comes to the operations of the business, the owner has the absolute control over it, so whatever the result of the operation...