The major factors affecting how a business is organized are usually:
The size and scope of the business, and its anticipated management
and ownership : A smaller business is more flexible, larger businesses
or those with wider ownership or more formal structures, will
usually tend to be organized as partnerships or (more commonly)
corporations. In addition a business which wishes to raise money
on a stock market or to be owned by a wide range of people will
often be required to adopt a specific legal form to do so.
The sector and country : private profit making businesses are
different from government owned bodies. In some countries, certain
businesses are legally obliged to be organized certain ways.
Limited liability : corporations, and limited liability partnerships,
protect their owners from business failure, and are treated as
separate entities, whereas an unincorporated business or person
working on their own is usually not so protected.
Tax advantages : Different structures are treated differently
in tax law, and may have advantages for this reason.
Disclosure and compliance requirements : different business structures
may be required to make more or less information public (or reported
to relevant authorities), and may be bound to comply with different
rules and regulations. |
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