How does an entrepreneur decide what structure of company he should start with e.g. partnership/ sole trade etc?

When starting a business,an entrepreneur is faced with an options whether to have a partner in the business or handle the business alone. Your decision could affect your liability, paperwork your company has to do and  your ability to make money.

There are different types of business entities like Sole trade which is complete responsibility over the company and the person has limited liability. You are also responsible for all the money you make. A partnership , however,  is when two or more people agree to share responsibility and money over the company. They plan what each person is accounted for and that person is responsible for that. The problem is, if that one person made a mistake,he could bring down the entire company. A corporation is legally separated from the people who founded it,they hire people to take care of it. A hybrid form of partnership, the limited liability company (LLC) , is gaining in popularity because it allows owners to take advantage of the benefits of both the corporation and partnership forms of business.

In order for an entrepreneur to decide the structure of his business,he must way the pros and cons for each option and calculate his every move. If he choose to go with a partnership,he must make sure that he trusts those who will share the business with him.



http://www.entrepreneur.com/article/38822