Select a business company that you are familiar with or that you find by conducting a search of the internet. Identify its business structure (i.e. corporation, or LLC, or some other form). Explain the advantages and disadvantages of that designation for the business. Provide examples.
Please provide citation and reference to sources. Quoted language must be put inside quotation marks and does not count toward the minimum word count.
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McDonald’s is a prominent fast-food company that falls under the designation of a corporation. This is the most complex business structure since the entity is organized under state laws. There are several advantages associated with this form of business structure. First, the shareholders have limited liability. Therefore, should McDonald’s declared bankrupt or close down, the investors would only lose the actual fund invested in the business. Secondly, the company has perpetual life, since the business structure allows for a change in ownership whenever necessary (there is easy transferability of ownership). For instance, since its inception in 1948, McDonald’s is still operational despite the various generations of investors that have bought and sold its shares over the years. Lastly, there is availability of capital because the company is a publicly traded. For S-corporation, it does not need to pay income taxes since the profits and losses tend to be passed through the investors (Romero-Jordan et al., 2019).
Despite the benefits associated with running a corporation, there are some disadvantages as well. The first disadvantage is the independent management, due to the presence of multiple investors, it is possible to run the business without supervision or any foresight, which is likely to lead to lengthy decision-making | PLACE YOUR ORDER NOW AT writtask.com | to avoid such a scenario is by the use of an organizational structure that provides order even as shares change ownership over the years, like in McDonald’s| PLACE YOUR ORDER NOW AT writtask.com | is that there is a possibility of double | PLACE YOUR ORDER NOW AT writtask.com | could pay taxes on the income generated, while the shareholders pay tax on the dividends earned (Romero-Jordan et al., 2019). This is true in scenarios where the company does not take advantage of the Double…