Business Organizations and Structures


BusinessOrganizations and Structures

Choosingan entity for a business is a crucial step in setting up a businessbecause the entity plays a valuable part in the team. To have abusiness structure that is beneficial is key in starting a business.One of the issues in the startup team includes the earnings anddeductions of the business. Tax planning and liability exposure areother issues that need to be checked. One of the best solutions tohaving a reliable and beneficial business structure is setting up abusiness that eases the ability to raise the needed capital and alsoone that is not at a risk of being bombarded with lawsuits.

Someof the ethical issues represented in the case include discriminationin the running or management of the business, offering sub standardwork to the customers in the business and also the issue of honestyand fairness in the business. These ethical issues are oftenexperienced in other businesses which if they are not well addressedmay pose a threat to the company business. In this case, the businessmay lose customers and other businesses will be reluctant to carryout business with them because of their unethical practices.

Theinformation in the article will lead the entrepreneurs to choose abusiness structure that best suits their needs for instance, anentrepreneur will go for a corporation because he will shield himselfand his assets from the creditors. As well, an entrepreneur willconsider incorporating his business to avoid issues of lawsuitsespecially if the business involves giving of advice or evenmanufacturing of products.

Asole proprietorship is owned by one individual and it does notinvolve any formalities in its formation and one retains full controlof the business. However, one is exposed to liabilities forinstance, one may be sued for production of sub standard products. Alimited liability company on the other hand involves fewerformalities but members or shareholders are shielded fromliabilities. An S Corporation is managed by a board of directors andthe profits of an S Corporation pass directly to the shareholders, itis not taxed twice. On the other hand, partnerships are smaller thanS Corporations and often have a managing partner. The partners oftencontribute a certain percentage to raise capital in line with theiragreements.


Carroll,A. B., &amp Buchholtz, A. K. (2010). Business&amp society: Ethics and stakeholder management.Mason, OH: CL-South-Western Cengage Learning.

Mann, P. H., McClung, R. M., &ampKemerer, K. L. (2014). Small Business Entrepreneurship: ASourcebook. Archway.