Business Entrepreneur: Types of Business Structures

Running Head: BUSINESS ENTREPRENEUR 1
Business entrepreneur
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BUSINES ENTREPRENEUR 2
Business entrepreneur
A sole proprietorship is managed and run by a single person. It is formed when a person
starts operating the business individually. The structure has advantages such as trouble-free to
form and the owner has total control of the proprietorship (Starr, 2016). Further they have a tax
advantage since they do not have separate tax fillings. On the other hand, there are disadvantages
since the owner bears the loss alone in case they occur, in case the business goes into debt, the
personal property can be used to settle (Starr, 2016).
A general partnership is usually owned by two or more individuals who enter into an
agreement to share the profits, assets and liabilities of a business (Currie, Chopra, Chen, Sun,
Doshi, & Tran, 2019). This kind of business structure has unlimited liability which means
personal properties can be used to settle debts. The reason that people choose to enter into a
general partnership is that they share profits and losses (Currie et al., 2019). Further, all members
are engaged in making decisions which can result in a better decision making process. It also
helps to pool resources easily to start a business compared to a sole proprietorship. On the other
hand, owners may conflict during decision making which can be time consuming to resolve.
Also, it is disadvantageous if the partners get into debt and the business asset cannot be able to
clear. As a result, the personal property is used to settle such debts (Currie et al., 2019).
A limited partnership is more of a general partnership but the management rests on a
general partner. The general partner has unlimited liability but the limited partners have their
liability limited to the total investment of the company (Everhart, 2018). The advantage is that it
helps to raise capital. The general partner has complete control and oversight of the business. On
the flipside, it may be disadvantageous since it has unlimited liability.