Defining The Three Different Ways That You Can Organize...

a. Define the three different ways that you can organize your new business. Given the above facts, please provide one advantage and one disadvantage with respect to each type of business organization and then choose a business structure for your new venture; explain why you chose the way you did. (10 marks) There are essentially three major types of business organizations: Sole Proprietorship: A business which involves an individual carrying on business alone, the business is the sole responsibility of one person, the owner. An advantage of running a business as a sole proprietor is that the owner has complete control and decision making power over the business. A disadvantage however is that the sole proprietor is held personally liable†¦show more content†¦I choose to start cooperation because it is a separate legal entity, separate from the people who own, control and manage it; by registering my business as cooperation I will not personally be responsible for the corporation’s debts. b.Based upon the business organization that you chose, how are you going to raise the funds to finance the business? Also, please describe what the provider of funds will receive in exchange for these funds. (10 marks) Since I have estimated that I will need $1,000,000 to finance my business I have to now think of how I am going to raise this capital, the different ways to raise capital, would fall under two categories – equity and debt financing. I will begin to sell ownership shares of my business by approaching investors, I already have a friend who has informed me that she would be interested in my venture and would be willing to invest $100,000 in my business, I have my family too that has pledged to help me financially. I can ask them to become equity investors in my business; I could offer them a share in the ownership of my business. Depending on the success of my company I could agree to issue dividends to them too. Various governments also give out loans to new businesses, called small business loans to encourage newShow MoreRelatedWhy Business Should Develop A Strategy1216 Words   |  5 Pagesâ€Å"What is Strategy†? If you ask different people to describe strategy, you will get many different answers. Strategy could be a set of goals that you achieve to gain competitive advantage over competitors. Strategy is something a business utilizes to build on to stay in business for a long time. 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