There exist three primary varieties of enterprise buildings. One ought to know the essential kinds earlier than getting right into a enterprise state of affairs to keep away from potential issues. The three primary varieties of enterprise buildings are as follows:
i) Sole Proprietorship:
This kind of enterprise is owned by one one that is named a proprietor. The proprietor manages the enterprise. Some disadvantages are as follows: the proprietor assumes all dangers of the enterprise and private belongings may be taken by collectors. One main benefit of the only real proprietorship is the proprietor makes all the choices.
a) The normal partnership enterprise construction is owned by a couple of particular person.
One or extra companions could handle the enterprise. As to disadvantages, like the only real proprietorship, companions assume the dangers for the enterprise and their belongings could also be taken by collectors. Additionally, companions could disagree about the easiest way to run the enterprise, which may lead to a battle. An benefit of a partnership is the homeowners share dangers and resolution making.
b) There is one other type of enterprise construction within the partnership area, which is
referred to as the Limited Liability Partnership (LLP). This type is completely different from the overall partnership construction. Liability is proscribed to the belongings of the partnership on this enterprise type.
a) The normal company is owned by stockholders (or shareholders).
Usually a company could have many house owners and they often make use of skilled managers. The proprietor’s threat is often restricted to their private investments and they typically have little or no affect on the enterprise selections. However, the company veil could also be pierce if the company is negligent in its operation.
b) The subsequent company type is the Limited Liability Corporation (LLC). This
construction is completely different for the overall company type. As the title implies, legal responsibility is proscribed on this type as in relation to the overall company construction.
c) Finally, there exists the non-revenue company. These varieties of firms
are usually 501(c) equivalent to a church, neighborhood primarily based organizations, a public highschool, YMCA, and the like. The tax buildings are usually completely different for the revenue making group as in relation to the non-revenue making firms.
Before any enterprise resolution is made it is best to seek the advice of an expert within the space equivalent to an lawyer who specializes within the area of enterprise formation. There are additionally some enterprise consulting corporations the place assist could also be obtained. The Small Business Association additionally has a bunch of people out there to assist often called, Service Corps of Retired Executive (SCORE), or Counselors to America’s Small Business.