Choosing Business Structure and Ethical Concerns

Choosing Business Structure and Ethical Concerns

From: Humphrey@outlook.com

To: james1980@yahoo.com

Subject: Choosing a Business Structure and Ethical Concerns

As we plan to start the business, you might wonder what will the right type entity that will bring them maximum benefit and push the business plan prospers. The business entity that I choose is based on our financial power, and how to succeed in production and selling of energy drinks. Considering our 50-50 contribution, we will adopt a partnership entity. The partnership entity will allow both of us to have an equal responsibility to the management of the business. The partnership will reduce the cost associated with the creation if business. This implies that there will be equitable sharing of responsibilities, profits and loses that attached to the company. Also, partnershipswillpose little ease in the creation process of thebusiness.

Despite production of energy drinks, the business with has social responsibility insupport of various community programs. Nurturing of youth to become innovative business-oriented will be the business social responsibility role. The business shall sponsor various mentorship programs that are aimed at nurturing students to be business-minded. Also, the business will offer internship opportunities for business students to nurture them and offer them an opportunity to create innovative ideas that could improve the business. The business will also sponsor local community programs like health education and sport as a way of branding the energy drinks.

Establishing a partnership instead of cooperation will reduce the severity of taxes. Only the profits that are armed from the business will be subject to taxation by the state government. Unlike a sole proprietorship, the partnership allows the business to grow fatter through larger access to resources and sharing of ideas. The flexibility in the decision-making process will enable the partnership to business to respond to the dynamics of market structure (Cheeseman, 2019). In taxation, the profits will be passed to us from the business and tax made on the individual return..

There are potential consequences that will be attached to the business. One is the issue of unlimited liability to debts. This implies that incases the business fail to cover its operational debts. We shall be responsible for equally seizing personal assets to cover for the debt. Also, there are various ethical implication that should be considered in establishing the partnership(Cheeseman, 2019). Being equal partners, accountability of the expenditure of business resources for the benefit of the business is crucial. Ethical accounting will also be critical for 50-50 share of profits and losses.

Reference

Cheeseman, H. (2019). Business law. (10th ed.) Upper Saddle River, NJ: Pearson. ISBN: 9780134729077