Business Structure Essay Example | Topics and Well Written Essays - 1750 words

Business Structure - Essay Example The structure depends on the business objectives and its strategy. Business structure has many facets including operational, organizational, marketing, financial and legal structures. The choice of structure depends hugely on organizational, marketing, operational and financial strategy and structure. In this case, the paper discusses the appropriate business structure of the three close university friends who have recently qualified as dentists and want to start a dental clinic (Denoncourt, 2012). The three university graduates will have to decide the best business structure for their clinic depending on several factors like risks and liabilities, cost of formalities and administration, control and management, legal limitations, financing, taxation, termination or closure of the business, and business expansion. General partnership is an association of two or more people who have decided to start up a business for the mutual benefit of the owners. The partners contribute property, m oney or services equally towards the business for their common benefit. The partners share profits equally got from the business. All the partners are allowed to participate in management, but give no liability protection to any of the partners. Therefore, coming up with a business structure is one of the significant steps a business makes in order to be in a position to run effectively. It is required of the partners to evaluate the options available and choose the best form of structure that best meets their needs. Although this process is time consuming and also costly, it is the best investment any partnership can make (Glover & Wasserman, 2003). The three partners will have to form their business without having to fill any legal document and this makes their business structure easy to form. It is, therefore, similar to a sole proprietorship in the sense that it is easy to form and any business partners can form it without any intention to do so. The business can either start as a sole proprietorship or later change into a partnership by adding other partners. The liability at which a partner in a general partnership is exposed to is also similar to the personal liability that a sole proprietor suffers, but there is an included element of risk. All the partners are responsible for all their actions and debts of the partnership and this means that each of the partners may lose interest in the partnership as well as everything they posses. This is referred to as personal liability (Glover & Wasserman, 2003). The three partners will be personally responsible for all actions as well as debts of partnership meaning that each of the three partners may loose not only their interest in partnership, but also everything they own. This means that if the partnership fails, or the business is sued, the creditors can go after the assets of the general partnership as well as the private assets of the three partners. Here, the partners will be responsible for their own ac tions and their partner’s action since the action of a particular partner can be imputable to the other partner through a joint liability. In general, the actions and mistakes of a particular partner becomes a responsibility of the other two partners. For example, Rose, John and Jane want to start a dental clinic where they have to share the profits equally. One day, John is involved in an accident while on duty and the accident injures Luis his patient. Luis