Best Business Structure for a Travel Agency Business
Added on 2023-05-28
4 Pages697 Words339 Views
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TRAVEL AGENCY BUSINESS
by Student’s name
Course code+name
Professor’s name
University name
City, State
Date of submission
by Student’s name
Course code+name
Professor’s name
University name
City, State
Date of submission
Question 1
Based on the information or rather the facts of the case study as provided, the best
business structure that the Barbara and Brandon can engage into for their Travel Agency
business is that of a corporation. A corporation has numerous advantages that make it ideal
business structure especially in circumstances in which the investors want to begin on a large
scale basis (Hedges et al. 2017). The first merit is that owing to the fact that a corporation mostly
has a large asset base; it can be used as collateral for acquiring loans from the financial
institutions since they will be guaranteed of the repayment of the borrowed loan amount. It is
important to underscore the fact that businesses often operate on loans something that is key in
ensuring that their operations are not stalled on the basis of inadequate operational finances
(Whitford 2018)). The second advantage that makes it ideal for Barbara and Brandon to go for a
corporation is that such a business structure has specific privileges, rights as well as liabilities.
Conducting business as a corporation often yields financial or tax benefits through these
can in some circumstances be offset by other considerations for instance reduced personal
control and increased licensing fees. The third advantage for forming a corporation as a business
structure is that it enables the proprietors to hire experts who have the potency to help in the
successful operation of the business (Duffy, 2018). Despite the above-mentioned merits for
operating a corporation as a business structure, there are, however, some demerits that come in
handy with this type of a business structure. The first one is to the effect that corporations are
capital intensive in terms of operations something that is a clear indicator that the investors have
to invest heavily for success to be achieved in the long run (Tomasic et al.2002). The second
demerit of a corporation is that in most cases, the investors lose the control of the business as
they entrust hired managers among other employees to conduct the daily operations of the
Based on the information or rather the facts of the case study as provided, the best
business structure that the Barbara and Brandon can engage into for their Travel Agency
business is that of a corporation. A corporation has numerous advantages that make it ideal
business structure especially in circumstances in which the investors want to begin on a large
scale basis (Hedges et al. 2017). The first merit is that owing to the fact that a corporation mostly
has a large asset base; it can be used as collateral for acquiring loans from the financial
institutions since they will be guaranteed of the repayment of the borrowed loan amount. It is
important to underscore the fact that businesses often operate on loans something that is key in
ensuring that their operations are not stalled on the basis of inadequate operational finances
(Whitford 2018)). The second advantage that makes it ideal for Barbara and Brandon to go for a
corporation is that such a business structure has specific privileges, rights as well as liabilities.
Conducting business as a corporation often yields financial or tax benefits through these
can in some circumstances be offset by other considerations for instance reduced personal
control and increased licensing fees. The third advantage for forming a corporation as a business
structure is that it enables the proprietors to hire experts who have the potency to help in the
successful operation of the business (Duffy, 2018). Despite the above-mentioned merits for
operating a corporation as a business structure, there are, however, some demerits that come in
handy with this type of a business structure. The first one is to the effect that corporations are
capital intensive in terms of operations something that is a clear indicator that the investors have
to invest heavily for success to be achieved in the long run (Tomasic et al.2002). The second
demerit of a corporation is that in most cases, the investors lose the control of the business as
they entrust hired managers among other employees to conduct the daily operations of the
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