Research Proposal Sample Advantages of Incorporating a Small Business

Research Proposal Sample: Advantages of Incorporating a Small Business ESSAY EXAMPLE An Incorporated Business An incorporated business is its own legal business structure that is set apart from the founding individuals. This implies that as owners of the company, you create a separate legal entity for business transactions. The new business entity transforms the way business is viewed through the eyes of the law (Model Organizational, 2014, 1252). In addition, this kind of business has possesses more credibility with potential employees, customers, and vendors (Toner, 2014, 25). Besides the tax reasons, the greatest motivation for meeting the costs incurred in setting up a corporation is the fact that the shareholder is not legally liable for the corporation’s actions. Advantages of Incorporating a Small Business Limited Liability of the Business The main advantage associated with incorporating a small business is the issue of the limited liability. Unlike in the case of the sole proprietorship, whereby the owner of the business is expected to assume all the company’s liability, in the case of an incorporated business, the liability of the individual shareholder is limited to the invested amount they have in the company (Electing, 2013, 854). This implies that unlike in the sole proprietorship, personal assets cannot be seized to pay debts of the business. Additionally, the sole proprietorship has the same rights as the individual in terms of ownership of property, incurring liability, and carrying on business. Corporations Carry On Notably, in terms of continuance, corporations are better placed than sole proprietorship (Jamison, 2007, 26). It has an unlimited life span and continues to exist even after the shareholder leaves, dies, or if the ownership changes. Raising Money Corporation have greater capacity to raise money making it easier for the business to grow and expand. First, corporations are allowed to borrow money and to incur debt (Model Organizational, 2014, 1253). Secondly, as Toner (2014, 25) notes, they can sell shares in order to raise capital. This is particularly a key characteristic of a corporation since equity capital is not repayable and does not incur any interest. ESSAY ANALYSIS Argument breakdown This essay argues that setting up an incorporated business has several advantages. The writer presents three benefits. The main advantage is â€Å"the issue of the limited liability.† Another advantage is â€Å"corporations are better placed than sole proprietorship.† The final benefit is â€Å"Corporation have greater capacity to raise money making it easier for the business to grow and expand.† Each of these topics are discussed in separate paragraphs.