The business industry is a comprehensive and vast area of professionalism. You can’t start a business without any proper knowledge on how to run it. Being an entrepreneur means you are aware and knowledgeable about the business sector or at least knows a good fraction about it.
You wanted to start a business, and yet you don’t have any idea of what industry or company you should create. So here’s a list of the types of business structures that could help you decide on what market or niche to venture.
The sole proprietorship is the most common structure of a business. This type of business is consist of an individual owner that can run and operate the business naturally. A sole proprietorship is a business that a single person operates. It means the owners must shoulder everything. From assets to liabilities and from marketing to production.
A sole proprietorship type of business means you will hold all the responsibilities. You can also define a married couple with the same kind of business as sole proprietors. A sample of sole proprietors is a catering company, freelance writer, tutorial centers, and financial planners.
Partnership or a general partnership type of business is typically a business that operates with two or more individuals. These persons contribute money, work, knowledge, and skill. These type of business can run better if there is teamwork within the group.
All of the workers equally contribute what they can help to make their company a success. Professional services like doctors, accountants, and lawyers are examples of a general partnership type of business.
A Limited partnership kind of business is the same as general partnership type of business. The only difference is that there are two parties involved. The general partner usually decides everything about the company, while the limited partner is more like an investor in the company.
This type of business structure is not common among entrepreneurs nowadays, but this business is as productive or even more potent as the partnership type of business. A limited partnership type of business is only typical for entrepreneurs who are looking for money investment.
Limited Liability Company (LLC)
LLC or a limited liability company is consists of a group with a particular written agreement. LLC is new to the business industry. This business structure is a combination between a corporation and a sole proprietorship.
Unlike other business structures, they call their members as shareholders. While in a limited liability company, they call their members as owners. However, there is one person who controls the daily business operations.
The benefits of working in a limited liability company are that the owners aren’t responsible for the business decisions and movement of the company. Also, in this type of structure, there are less paperwork to handle.
One of the most typical business structure is the corporation. A corporation is more complicated than the other types of business. But this type of business structure has a lot of benefits, especially when it comes to financial advantages.
Also, marketing a corporation type of business isn’t difficult. Flyers, tarpaulins, business cards, and posters are the means to promote a business.
Doing business as a corporation may generate tax and some other benefits. This type of structure also has particular rights, liabilities, and privileges.
Starting a business may be difficult for some entrepreneurs, but a little knowledge could become an asset someday. Knowing these five types of business structures may help you choose if you’re undecided on what business you should start.
Start by learning the types of business structures, and you may not know one day, you will become a successful business entrepreneur.