Unit 3 Business Environment Analysis

| A sole proprietorship is easy to create; there is minimal creation cost and time.The single owner has autonomy in decision making; sole owner makes all decisions related to the business and has complete ownership of business’s finances.

The organizational forms a company might have as it evolves from a start-up to a major corporation are proprietorship, partnership, or corporation.

A partnership is an arrangement between two or more groups, organizations or individuals to work together

Sole proprietorship: Is the simplest and most common business structure. There is no legal distinction between the proprietor and the business, which means it is autonomous. You are entitled to all profits and responsible for all your business's losses and liabilities.

A partnership is an arrangement between two or more groups, organizations or individuals who work together to achieve common aims or who have common interests.

Sole Proprietorship: A type of business that is owned by and run by one person with no legal difference between the business and the owner. It is easy to form with no cost or time to initiate. It gives the owner the ability to self-govern the business. There are drawbacks; only one owner can be established not allowing a partner. Also, unlimited liability puts the owner’s personal assets in jeopardy with the creditors.

General Partnership: Occurs when two or more individuals get together to operate a business with the intention of making profit. Each individual is a general partner of the business and all profits and losses are shared between the partners. General partnership agreements can be a written or verbal agreement.

A sole proprietorship is a business owned by only one person. It is easier to set up and one has complete control over the business. Sole proprietorships also have tax advantages.

Sole proprietorship is a business organization operated by one owner. For example, you start a landscaping business by yourself.

The corporation structure has multiple owners and operators and is complex and expensive. A corporation is an independent legal entity owned by shareholders. The corporation itself is legally liable for the actions and debts of the business. The advantages of a corporation structure are limited liability, ability to generate capital, corporate tax treatment, and attractiveness to potential employees. The disadvantages are time and money, double taxing, time, and paperwork. Corporations pay income tax on their profits. In some cases, corporations are taxed twice – first, when the company makes a profit, and again when the dividends are paid to shareholders on their personal tax returns (U.S. Small Business Administration, 2013).

An entrepreneur who is willing to take risks in the process of being aggressive would be willing to even risk personal wealth and property, which would lead to greater success than entrepreneurs who were not as willing to take such risks.

For many, the American dream involves owning a business and achieving financial stability. However, to achieve this American dream, one must create a business plan that involves the consideration of appropriate business structure. In the United States there are several business structures offered for consideration. Sole proprietorships, partnerships, corporations, and limited liability companies have their advantages and disadvantages. Any new business must evaluate the available business forms to determine which structure will be the most advantageous to the new business. The three most important aspects to determining a business structure are taxation, liability, and growth opportunities (capital mainly).

Partnership is the relations which exists between partners carrying on a business in common with a view of profit, which means there must be some continuity or repetition of trading activities and working on behalf of each other. (James 2014, p. 506-507)

A partnership is a business organization where the partners own the business together and are

A partnership is defined under common law as a contractual relationship between two or more persons who join together to carry on a trade or business, each contributing money, property, labor, or skill, and with the expectation of sharing in the profits and losses.