Sole proprietorship is an enterprise by a single person or married couple. It is the most prevalent business structure. When it comes to forming the business, individuals need to select its name, acquire licenses and permits, develop discrete business expense finance, and report taxes in the correct manner. On personal liability, a sole proprietor is liable for the enterprise when it experiences debts, which it is incapable of paying using profits, hence responsible for the payment. On matters related to taxation, sole proprietors need to make sure that they report their business losses or incomes on their individual income tax returns while no separate means prevail for taxing the business. A sole proprietorship features various advantages, which comprise of ease of forming and setting up, flexibility in management, reduced government control, and minimal recordkeeping (Carrington, 2012) . The disadvantages consist of sole proprietor’s unlimited personal liability, uncertain life of the business, challenges in acquiring funding.
A partnership entails a business that comprise of two or several persons who agree to avail the labor, finances, and skills to establish an enterprise. The members share the losses, profits, and business management. The formation process requires that the partners select a name for their enterprise and determining viability. They register the name of the business with the federal, state, and local authorities. They negotiate and institute the agreement for partnership and later acquire the needed local licenses. They determine the partnership’s tax obligations and address and needed registration (Carrington, 2012) . The last process entails opening the enterprise’s bank account. On personal liability, all the partners are equally and personally liable for the debts that the enterprise incurs based on the formal agreement terms of the partnership. Regarding taxation, they file taxes in Form 1065, which is based on the amount that the partners contribute to the business. The benefits of the business structure comprise of shared startup costs, shared work and duties, shared expenses and risks, and mutual motivation and support. Regarding the disadvantages, the partners are mutually liable for the actions that others engage in the business (Davis, Cassim, Geach, & Mongalo, 2011) . They share profits while they lack overall enterprise for the enterprise. It is not possible for friendship to survive the business.
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The formation of a Limited Liability Company (LLC) requires one of several entities or people via an agreement written in a special way. The agreement offers details of the company, such as managerial provisions, interests’ assignability, and loss and profit distribution. LLC can undertake any legal for profit business undertakings aside from insurance or banking. On formation, the first process revolves around selecting an available name that complies with the LLC rules of a sate. Filing of paperwork, referred to articles of organization, follows. The members develop the operating agreement of the LLC, which details the duties and rights of the members. A notice is published on the intention for creating an LLC. The last phase entails acquiring permits and licenses for the enterprise. On liability, the owners of the enterprise are not personally liable for the liabilities and debts of the enterprise (Epstein, Freer, Roberts, & Shepherd, 2019) . Concerning taxation, the owners are taxed based on their individual tax rates. For the advantages of this business type, the members are not personally liable for the organizations activities, the members receive profits without government taxation, flexibility in management via allowing the members to participate in decision-making processes, and easy startup as well as upkeep (Davis, Cassim, Geach, & Mongalo, 2011) . The business structure also features various drawbacks, such as restrictions on limited liability, taxation on self-employment, and repercussions to the turnover of the members, which affect their operations considerably.
A corporation serves as complicated business type. It features particular privileges, rights, and liabilities that the ones of individuals. Undertaking business operations as an enterprise fosters both financial and tax advantages. Forming corporations might be for nonprofit or profit reasons. The process of forming a corporation commences with selecting an available enterprise name what matches the corporation rules of a state. The subsequent process entails appointing the corporations first directors (Carrington, 2012) . Afterwards, it becomes essential to file formal paperwork, referred to as ‘articles of incorporation.’ The establishment of the bylaws for the corporation follows. The initial meeting with the board of directors is held while the next phase entails issuing stock certificates to the corporation’s initial shareholders (owners). The last phase entails acquiring licenses that the enterprise requires (Epstein, Freer, Roberts, & Shepherd, 2019) . On personal liability, the incorporation of an enterprise distances it from the shareholders. The enterprise undertakes business transactions using its individual name while the shareholders are not liable for any business actions or those of other shareholders. Regarding taxation, a corporation pays corporate tax, which is usually charged on its net profits while taxed at the level of the institution. The benefits of this business structure comprise of availability of legal liability, employees’ stock options, right for equal protection and due process, as well as freedom of speech (Davis, Cassim, Geach, & Mongalo, 2011) . The cons comprise of the sophisticated nature of the enterprise, lack rights to legal counsel, and hefty costs and lengthy time for formation.
From my perspective, if I were to own a business, the business structure that I would prefer is one of a sole proprietorship. For this type of business, it does not require huge funds to open while it is possible to exercise flexibility in managing the enterprise. The owner also enjoys all the profits realized while it does not require complicated management practices, as it is the case with other types of enterprises. In this sense, the ease of establishing this kind of business makes it my ideal choice, particularly since I have limited management experience.
References
Carrington, A. (2012). Business structures and incorporation. San Jose, CA: Aauvi House Publishing Group.
Davis, D., Cassim, F., Geach, W. D., & Mongalo, T. (2011). Companies and other business structures. Oxford: Oxford University Press.
Epstein, D. G., Freer, R. D., Roberts, M. J., & Shepherd, G. B. (2019). Business structures. Saint Paul, MN: West Academic Publishing.
