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Know the Business Structures
Among the business structures available, seven of them are the major ones. The reason for the existence of several models is that businesses thrive at different models. Different businesses have diverse rules. Read on to know the different models.
The first one happens to be the sole proprietorship but see page. A single person is the one who owns this type. Although the owner bears all risks and debts, it is very easy to start. Also, there is no possibility of the sole proprietor selling shares.
The second one is the General Partnerships. There are several partners in this one unlike the sole proprietor although they are similar in other areas. All partners share the profits and losses. Too many partners will make decision making too hard. If the business is set on an informal agreement, the partnerships always fall.
The Limited Liability Partnership is the other category but learn more. You will need paperwork and also legal fees while starting this type of partnership. Other partners are free to join later and the liability is limited. All general partners will share all debts and profits. This is the case with all legal liabilities.
The other category is the one referred to as the corporations. The owners of this one are the ones who own shares in the company. The shareholders will decide the running of the company. The number of shares an individual has will dictate the proportion of profits they will receive. Raising capital is easy since it only requires selling of shares. Also, banks will willingly give loans to corporations. Another good thing with corporations is that there is no personal liability. It is extremely hard for decisions to be made in corporations. When it comes to taxes and legal fees, corporations will pay more.
Again, there are the S Corporations. There is a difference between these and the standard corporations. The shareholders will bear all the losses and tax deductions. Again, the shareholders cannot be more than 100. However, the shareholders are highly protected but view here.
The other category is the Limited Liability Companies but learn more. These ones boast a recent business structure. Aspects of partnerships and corporations are merged in them. The owners will be required to pay taxes on their profits.
However, the owners have a level of protection. This is the best category for those who run high risk businesses.
A Co-Op is the other type of structure but learn more. members of a cooperative society are the ones legible to run this type but check it out. The members benefit since they are provided with services.