Business Models Essay

1981 words - 8 pages

Business Models
When stating up a business, there are many different business models that can be chosen. Some of the most popular models are: Sole Proprietorship, Partnership, Limited Liability Partnership, Limited Liability Company, S Corporation, C Corporation and Franchise. When deciding which business model is most appropriate, there are two major elements to consider: taxation and liability. Each of the above business models has advantages and disadvantages in these two areas. This paper will discuss the pros and cons of each business model and provide a scenario that illustrates when a particular model would best be utilized.
Sole Proprietorship
In simple terms, sole ...view middle of the document...

Additionally, access to capital is limited to the owner’s personal funds and any personal loans that can be obtained.
A perfect scenario for a sole proprietorship would be a person who wanted to start up a small business mowing lawns in their neighborhood. This would be a simple business with one owner/employee. A sole proprietorship would work well in this situation as the owner would be heavily involved in all aspects of the business. Additionally, liability risk would be minimal based on the nature of the business.
A partnership consists of two or more persons who come together to run a business. There are two kinds of business partners, general partners and limited partners. General partners are equal partners and they share equally in the company’s profits and losses along with the management of the company. Limited partners are known as silent partners who provide capital for the business and share the profits, but they have no control over the operations of the business (everymanbusiness, 2011).
Business partnerships have benefits over sole proprietorships in that the work burden is shared among the partners. In the case of general partnerships, profits and losses are shared equally by the partners. In the case of limited liability partnerships, usually there exists at least one general partner who is financially responsible for the business, while the limited partners are only responsible for the business up to the amount of capital they have invested. Just like sole proprietorships, profits and losses are reported on the partner’s income tax.
The one major downside to partnerships is that the general partners are liable for all expenses of the business, similar to a sole proprietor. If a lawsuit is filed against the business, and the plaintiff wins the lawsuit, the general partner’s personal assets can be taken by the court to satisfy the lawsuit. Limited partners are shielded from liability as they are only responsible for the amount of capital they have invested.
A situation where a partnership would be a good business model would be if two individuals in town decided they wanted to start up a lawn mowing business. The two could partner up to create a business where they would be both the owners and the employees. Liability risk would be small due to the business environment and the fact that the owners would also be the employees.
Limited Liability Company (LLC)
An LLC is a relatively new type of business structure that combines the benefits of reduced taxes found in partnerships and sole proprietorships with the limited liability found in corporations. LLCs are similar in nature to limited liability partnerships.
Owners of an LLC are not liable for the debts of the company, as is the case with sole proprietorships and general partnerships. The personal assets of LLC owners are safe, even if the company operates in...

Other assignments on Business Models

Transformational Models Essay

1041 words - 5 pages ethical and moral standards. They are role models, visionaries and most of all empowering. The transformational leaders desire to make things happen and to change the way things are. Transformational Leaders inspire a shared vision. Transformational Leadership Model: Inspirer Transformational leadership theory is about leadership that promotes positive changes. Followers take care of each other’s interest and that of the group. The leader

Three Models Essay

1844 words - 8 pages claim of an “all-at-once” military conquest of Canaan listing the unconquered territory (Judg 1:9); Jerusalem (Jebus), Hebron, and Taanach examples will be given and other models will be given such as the conquest model and social revolution model. Main discussion and conclusion will be given Main discussion The Peaceful Infiltration Model Albrecht Alt and Martin Noth were responsible for the peaceful infiltration. According to Alt, the

Behavioral Models Of Personality

772 words - 4 pages Behavioral Models of Personality Critique Draya Ashlee Ashford University Abstract This paper explores my knowledge and opinions on the Behavioral Models of Personality (BMP). This article will show the various theories of BMP present Behavioral Models of Personality Critique Personality is the combination of characteristics and qualities that mix together to form an

Fiscal Policy & Macroeconomic Models

1031 words - 5 pages FISCAL POLICY & MACROECONOMIC MODELS There are three macroeconomic models in which to analyze the effects of changes in fiscal policy: Keynesian, Monetarist and Classical. Keynesian Model The Keynesian model focuses on attempting to manage the “Demand” side of the economy by using taxation and spending to redistribute income and wealth. The rationale is that redistribution of income and wealth via taxation and use of transfer payments

Models Of Crisis Intervention

1984 words - 8 pages Models of Crisis Intervention Carolina A. Pagan Troy University Abstract Natural disasters come fast and leave fast but the communities are left with long and difficult injuries. They can be physical, monetary, family structure, and mental injuries and they do not leave along with the hurricane or ease up quickly like the earthquake, they stay around leaving many in need of multiple services. Communities are not ready most of the time and

Celebrity Role Models

978 words - 4 pages Brenda Ortiz October 10,2013 Mrs. Hua English 801 B “Celebrity role models” Miley Cyrus, Amanda Bynes, and Britney Spears what do all these celebrities have in common? They all rose to stardom as childhood stars and have become a tremendous part of children’s lives. They have transformed from talented singing to talented acting. As these stars tend to grow older they become exposed to an amount of certain things. These things include

Models Which Make Suppositions About Human Nature And Behaviour At Work

1233 words - 5 pages Unit: 4001V1 Managerial styles and behaviours 1 Understand assumptions about human nature and managerial behaviour. 1.1 Identify models which make suppositions about human nature and behaviour at work. 1. Kolb’s Learning Cycle Researcher and organisational psychologist David Kolb states that knowledge results from the interaction between theory and experience. He states that learning takes place in four stages in a cycle that

Oi 361 Week 4 Mental Model-Mindsets

1269 words - 6 pages change mental models since they are not forces that one is aware of consciously, but subconsciously. Vernon and Bud are against the new change that has been introduced by the new owners of the company. However, from time to time people must be willing to change for the good of the business even if they have the fear of the unknown (Rowe, 2004). People can take certain steps to change their mental models so as to improve on the quality of their

How To

752 words - 4 pages , Standards, Models) (Principles, Standards, Models) Business Business Direction & Direction & Strategy Strategy Application & Infrastructure Application & Infrastructure Projects Projects Page 8 Management Management Values Values (Contribution, Value, Risk) (Contribution, Value, Risk) IT Organizational IT Organizational Alignment Alignment (Structure, staffing, skills, processes) (Structure, staffing, skills, processes) IT Architecture

A Microfinance Mis

263 words - 2 pages A Microfinance MIS XBIS/219 06/15/2012 Clara Spenny A Microfinance MIS The Business Intelligence and Reporting Tools (BIRT) is an Eclipse-based open source reporting system for web applications, especially those based on Java and Java EE ( The report designer and a runtime component are BIRT two major components. When these two components are combined it will allow the user to create graphically rich reports. BIRT also


1829 words - 8 pages . 1-2 1 9/12/2011 Learning Objectives 6. Describe some EC business models. 7. Describe the benefits of EC to organizations, consumers, and society. 8. Describe the limitations of EC. 9. Describe the contribution of EC to organizations responding to environmental pressures. 10. Describe online social and business networks. 1-3 Electronic Commerce: Definitions and Concepts  electronic commerce (EC) The process of buying, selling, or

Similar Documents

Business Models Of Popular Websites Essay

4859 words - 20 pages Business Models Of Popular Websites Business Essay The business model can simply be known as a working description that includes the general details about the operations of a business. Every business model consists of a number of factors. Some of these factors are expenses, revenues, operating strategies, corporate structure, and sales and marketing procedures. In general, anything that has to do with the day to day functionality of the

Leadership Models Essay

3099 words - 13 pages | Mid-Term Exam | | Monica Ponder MAN 6296 February 17, 2012 | Table of Contents Leadership Models 1 Lincoln on Leadership and Civil War Leadership 1 Personal Traits 3 Ethics 4 Learnings from Tim Irwin and Tony Dungy 6 Personal Leadership Development 7 Leadership Models 1. We have studied several leadership models. a. Upon which model(s) are you building your personal leadership foundation? I have

Models! Essay

1032 words - 5 pages both other groups within prison and identify more with prison officers and staff. Tend not to be very aggressive whilst in prison. 2. Situational models – these say that the prison environment plays a part in the aggression shown by prisoners. Situational factors can be: * Organisational – leadership, policies and procedures * Physical – security level, available resources * Staff characteristics – gender, level of experience

Key Models Of Management Theory Essay

1652 words - 7 pages 1. Discuss the main features of the key models of management theory since 1900. How have they contributed to today’s people management practices? This assignment will discuss the main features of the key models of management theory since 1900, it will also outline how they have contributed to today’s people management practices. There are 4 models that will be covered in this assignment, each model contains different theories by various