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Choice of Corporate Structure involves a lot of aspects. It depends on the founder whether he or she wants to go solo, or whether wants an investment from a third party. Moreover, the choice of corporate set up also determines the kind of financial insurance the founder or the key stakeholders are bound to get.
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Kinds of business entities or corporate structures
Sole proprietorship: It is the kind of set up where a single individual is responsible for everything, right from managing finances to procuring funds. The profit will belong to the founder, and so shall the loss.The partnership is a structure in which two individuals or two business entities share the Account books. This will include the sharing of profits, losses, taxes, loans, and liabilities.
The corporation becomes an entity which is created with the purpose of doing business. The founders might or might not be a part of the entity, and the Board of Directors, who are also the stakeholders in the company share the financial, commercial and social responsibilities.LLC or Limited Liability Companies involve stakeholders in sharing profits but not losses. The losses are passed on to the Accounting books and are a part of tax calculations, and the profits are distributed among the key shareholders.
Choice of corporate structure assignment help is essential in today’s times as there are so many entities, dealing with so many situations that a student might find it difficult to cope up with the needs of the assigned project.
How does a corporate structure impact the financial set up?
It is extremely difficult to imagine the functioning of Finance without acknowledging its Corporate set up.Since finances are handled by the investors, most of the financial activities are carried out considering the structure in mind.Insole proprietorship, the finances are managed by one person, and hence there is no question of passing on the liabilities to a third party.
In case of a Corporation, the liabilities get transferred to a company account, and all the shareholders are equally accountable for profits and losses. They might earn huge dividends in case of profits, and might have to face huge cut-offs in case of the company running into losses.
Is LLC better than a corporation?
There is no sure shot method to determine which set up is the best. It all depends on the financial aspirations of an individual or a company on figuring out what kind of corporate structure would suit their goals.
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