Hi, these are 2 student discussion posts that need responses with the minimum of 100 words each. Each response must include a reference
1. Hello class,
One well-known business with a distinctive structure is Starbucks Corporation, a globally recognized coffeehouse chain. Starbucks operates as a corporation, which is a legal entity separate from its owners, offering several strategic advantages. One of the main advantages of the corporate structure is limited liability, meaning that shareholders are not personally liable for the company’s debts or legal issues (Kenton, 2023). This protects investors and encourages investment. Another benefit is the ability to raise capital through the sale of stock, which has helped Starbucks expand rapidly across international markets. However, corporations also face notable disadvantages. One significant drawback is double taxation—corporate profits are taxed, and then shareholders are also taxed on dividends received (Internal Revenue Service [IRS], 2023). For example, while Starbucks benefits from its ability to raise large sums of capital, it must also navigate complex tax regulations and reporting requirements, which can be costly and time-consuming. Overall, the corporate structure has enabled Starbucks to grow into a global leader in the coffee industry while managing the responsibilities and limitations that come with being a publicly traded company.
References
Internal Revenue Service. (2023). Corporations. https://www.irs.gov/businesses/small-businesses-self-employed/corporations
Kenton, W. (2023, June 15). Corporation: What it is and how to form one. Investopedia. https://www.investopedia.com/terms/c/corporation.asp
2. While there are several businesses that I can choose from, I chose my own business. Being in business as a childcare owner, my business structure is set up as sole proprietorship. While I may change my business structure to a Limited Liability Company (LLC) in the future I thought it best to start out as sole proprietorship due to the fact that I am the only one overseeing my business as of now.
Some advantages of operating my business as a sole proprietorship is that I don’t have to answer to anyone per se. I have complete control over my business and how it is operated. Another advantage of operating my business as sole proprietorship is that I don’t have to deal with all of the extra paperwork for my business and the cost to start my business was inexpensive. I also don’t have to worry about having others on the board meaning managing my business comes with ease.
The disadvantages of operating as sole owner of the business is that I have to bear all of the responsibility of the business on my own. The unlimited personal liability that a person has in operating their business as sole proprietorship is not really ideal for the owner. It’s very risky. Another disadvantage is that lenders are not so eager to lend to sole proprietorships. Lenders tend to stray away from lending funds to sole business owners because if the business fails, that puts the personal assets of the owner at risk which could jeopardize the ability to pay back the loan.
Reference
WebHR. (n.d.). Sole Proprietorship Advantages And Disadvantages.
