In response to your email the first thing to do is to discover the type of business you are developing. This will allow the planning to proceed a business structure must be determine in order to see what tax structure the company will fall into. Discovering the business structure is critical before you can develop the business plan. Starting a business is not an easy move to make and key decisions have to be made before the correct options can be determine. First, understand what business structure exist and then a defining plan can be determined or discovered. There are three options to consider, first being Sole Proprietorship, Partnership and the last being Limited Liability Partnership. Below we will discuss some advantages and disadvantages for each. As well as make a recommendation.
In your email you stated that you are not familiar with running a business, becoming the sole owner of a business is easy and offers more flexibility in controlling your company. The advantages of this structure is as an
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Usually, Partnership is formed by partnership agreement; A contract between individuals defining partner duties, share of profit and loss for each partner and explaining what if the situation in case of any death and withdrawal of a partner from the business. The partnership is relatively simple to establish in comparison to corporations and LLC. Profit of partnership business passed through the partner's individual returns and taxed as per personal income tax. Partners are braced with unlimited liability for the debt. Conflict and disagreement among partner can delay in the critical decision with the consent of all partners is required for a business decision. The death of a partner will result in dissolve of partnership and limitation of transfer of partnership are the major disadvantage of partnership business
Partners are the agent for each other with respect to the conduct of the business which means an individual partner can incur an obligation for which all the other partners are also responsible; 2.
This would be an excellent business organization because there wouldn’t be any liability since the owner has the money to purchase the chocolate machine so there wouldn’t be any debt. Also, the ownership would be shared so there wouldn’t be a lot of pressure on what person. Next, since the business has failed the first couple of times this partnership can be the start for new ideas in order to keep the business from shutting down as the previous times. Lastly, the partner should be good at handling day-to-day operations, so the other person wouldn’t have to struggle with that.
1.Advise Shania on which of the business forms under consideration best accomplishes her business goals. Thoroughly explain the reasons for your recommendation. Shania Jackson is a Christian entrepreneur and she wants to open a Christian Coffeehouse near the Denver, Colorado area. Her husband, Marvin, is willing to participate in the form of capital to the business but has no interest in participating in its operation or management. Knowing this, I believe a limited liability company (LLC) would be the best for Shania’s business goals.
This can be avoided as if the owners have most of the shares with him then he can make the main decision as he holds most of the businesses shares whereas others hold little amounts of shares. One disadvantage of public limited company can be there are many legal formalities to start a public limited company. RSPCA: RSPCA is a charitable trust and the type of ownership is charitable as is it non-profit because the purpose of this business is to generate funds in order to support animals and people for a good cause. There is no liability for public sector as the business is funded by the government.
The benefits of using this strategy is reducing costs and improving efficiencies by decreasing transportation expenses and reducing turnaround time. This is the system Carnegie used throughout his journey of a business man to keep costs low and profits high. In 1901 he decided to take his fortune and he create many things that focused more on philanthropy and education. I believe that his dedication to the education of the citizens also helped shape America and its economy. He
In addition, another question that I find interesting is: What would be the advantages to choosing this option? One advantage could be I could do
For instance, they should not use their bargaining power to unfairly reduce reimbursement rates or limit the number of providers available to patients. Joint ventures refer to collaborations between two or more companies to undertake a specific business project or activity. Joint ventures can provide benefits such as increased efficiency and reduced costs, but they must also comply with antitrust laws to prevent anti-competitive behavior. In the healthcare context, joint ventures must not create a monopoly or unfairly limit
1. There are several different types of business partnerships. I wasn’t aware that by being a partner within a business, it doesn’t always mean they share an equal role. Some are more involved in the everyday operations while others stay behind the scenes. A general partner takes on the role as the “overseer” and is active within the operations.
Wanda has ask me to consult on her business Salty Pawz, As a consultant I feel my responsibilities are to give alternatives and my recommendations with the information I have available Wanda first concern was her personal liability in connection with her company, the alternative to her sole proprietorship would be to form a corporation of the several that are available the only one that makes sense is the limited liability corp. so the options are that or remain a sole proprietorship. My recommendation would be to remain a sole proprietorship, and my reason behind this is she has expressed concern over the hours she has been putting toward her business It takes some time and expense to form a an LLC even though it does resolve her liability issues. It is totally at this point not necessary to do that she can increase her liability insurance to a point that she’s comfortable with and even add product liability insurance to a point where she is comfortable.
“An LLC is an unincorporated business entity that combines the most favorable attributes of general partnerships, limited partnerships and corporations. An LLC may elect to be taxed as a partnership, the owners can manage the business, and the owners have limited liability” (Cheesman, 2006, p. 382). This structure would protect the liability risks and the interest to Pete and Paul. In order for Pete and Paul to form an LLC in the state of Colorado, they will need to file a formal article of organization with the Colorado Secretary of State which will be governed according to Colorado State law. In Colorado, every LLC must also appoint a Registered Agent.
It had a few advantages over other businesses. The Joint-Stock Company helped out by not dissolving the death of the main owner and by limiting their liability, in which
It cannot be created for individual purpose or family benefits. A non-profit organization cannot be sold to other individual or organization, but it can pass to someone who is willing to continue it. Formation of limited-liability company (LCC) aims to gain more benefit for entrepreneurs by limited liability. It has tax advantages of a partnership along with the corporation and the benefits are similar to the S corporation in which special eligibility is not required.
Due to different country’s policy, different business model are required for IKEA to run their business. For examples, IKEA will need to implement joint ventures as their business model to become successful in the Indian and China marketplace. Since the government for these countries requires that local business operations own about 51% control by Indian nationals, IKEA 's should find the right partner for its own. There are some advantages and disadvantages for IKEA to implement Joint venture as their business model. For the advantages are provide an opportunity to IKEA to access to the new markets and distribution networks, increased capacity to expand their business in foreign market, IKEA can share the risks and costs together with their partners and it will help IKEA to access to local resources, including specialised staff, technology and finance aspect.
According to Forbes researches, less than one third of family businesses survives the transition from first to second generation ownership. Another 50% don’t survive the shift from second to third generation. Therefore, statistically, only around 15% of all family companies manage to stay in the hand of the founder’s heirs. As these types of firms account for a large percentage of the economy (although many are very small, their aggregate creates an estimated 70%-90% of global GDP annually) it is really crucial to study the reasons behind these difficulties in achieving intergenerational succession. There are many reasons that have been held responsible for these high failures rates.
Also, it happens to be a separate entity from the partners. Cons: Every partner is responsible for their own negligence, misbehavior, etc. While every partner is responsible for their actions, if someone under them makes a mistake the partner takes the blame for that also. Not to mention, LLP is only available for specific occupations.