Types of Business Structures

BUSINESS ORGANIZATION 1
Business Organization
Student’s Name
Institution Affiliate
Date

BUSINESS ORGANIZATION 2
Business Organization
Types of Business Structures
Partnership
A partnership is a business that is owned by a variety of owners, and each of them has
invested heavily in a particular business. The partners of such a business often have both limited
and unlimited liabilities. One key advantage of the partnership business is that it is easy and
simple to establish (Argyris, 2017). However, it has limitations, and an essential disadvantage is
that it the liability of the partners of the business in regards to debts is unlimited.
Sole Proprietorship
It is a type of business that is owned and run by one particular individual, and there is no
legal distinction between the business entity and the owner. A vital advantage of this business
enterprise is that they are easy to form. However, it has the disadvantage that the owner of the
business is particularly liable for all the losses and liabilities of the business.
Companies
They are a legal entity that is made up of an association of various individuals to make a
profit. One key advantage of a company is that they usually have a perpetual existence such that
the insanity, death as well as the insolvency of the directors and the shareholders do not affect
the existence of the firm (Roberts, 2018). On the other hand, a key disadvantage of companies is
that there is no secrecy because companies are required to submit statements to the registrar of
the companies. The lack of secrecy is further stimulated by the provision of annual reports to the
shareholders that could also made available to the key competitors of the firm.

BUSINESS ORGANIZATION 3
Corporation
A corporation is a group of companies with the authority to conduct a particular activity
as a single entity, and this is recognized in the law. One key advantage of a corporation is that
the shareholders do not have any particular liability for the debts owed by the corporation
(Burke, 2017). The disadvantage of a corporation is that it incurs double taxation in the sense
that its income is taxed as well as that of the shareholders’ dividends.
Question 2
The business structure selected for the venture is a company. Therefore the following will
be the principal sources of funds. The primary sources include venture funding, working capital
loans, equity, debentures, letter of credit, retained earnings and term loans among others.
However, for the start-up business, the principal sources of funds would be, personal investment,
government subsidies, venture funding, and angels. The parties involved in the provision of
funds will become the principal shareholders of the company; thus they will be charged with the
responsibility of management and general administration of the firm(Argyris, 2017).
Other responsibilities of those who will contribute their money include a declaration of
dividends, approval of the company's financial statements, winding up of the company and
making changes to the company's constitution where necessary (Roberts, 2018). The receiver of
the funds will be responsible for keeping custody of the money to ensure that it is safe and utilize
for its actual purpose. Another critical responsibility of the receiver will be to allocate the funds
appropriately to a variety of functions.
Question 3
Based on the business organization that is a company, the major liability I would be faced
with is the debts that I would borrow to finance the whole business idea fully. The major method