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Business Structure That Makes Money: What’s in it For You?

Business is basically an organized group of individuals who work together in any business endeavor. In a business, individuals work collectively to either create and sell goods or services to customers. Others also purchase the goods and services being sold by a business. Thus, a business can eventually earn a surplus through the sales it makes.

However, in order for a business to be able to attain common gain, it needs to operate in a manner that allows for common gain. For example, a business that produces and sells goods should strive to make a profit in order to be able to expand its operations. Likewise, services offered by a business organization should also be able to generate revenues and be able to contribute towards the betterment of society as a whole.

Common profit and revenue generating businesses include sole proprietorships, partnership, limited liability companies, corporations, partnerships and cooperatives. Among these, sole proprietorships are the easiest to understand since they are governed by their own set of laws. Such businesses make their money by selling goods or services directly to customers. Examples of such businesses are privately owned shops, restaurants, bakeries, taxi cabs and private tutoring. On the other hand, corporate entities are governed by statutory laws that lay down rules on how such entities may deal with their business clients. Examples of such statutory laws are labor laws, professional and business licensing rules and taxation.

Solicitation is another type of common law making money transaction. For example, a sole proprietor who engaged in buying goods and then reselling them to consumers may be engaging in solicitation. In this case, the person making money from selling the goods receives an intangible asset in the form of commissions from the sale of the product. Another example of solicited making money transactions include sales of goods for less than retail price and payments made by the seller to the purchaser. Again, in this instance, the seller obtains an intangible asset in the form of the payment made by the purchaser.

Private Placements and Promotional Offerings are business activities that do not fall under the jurisdiction of the state but yet still are considered as an element of overall profit creation for a business. The sale of securities, i.e. warrants, calls or repositions, is an example of such activity. Private placements are made by a business in order to raise capital for particular projects.

Business structures that make money are necessary for every business entity to exist. But making money also involves risks. A business may not earn profit even after engaging in a series of well planned activities. The failure of one activity may adversely affect the performance of the rest.