Originally Posted on September 1, 2016 and reposted on September 25, 2018">Organizational Structure

The best organizational structure

The best organization structure that fits our business is a corporation. A corporation handles the responsibilities of the business thus exempting us from liabilities of the business; a corporation allows business owners to take limited liability making it very difficult for anyone to make a claim against the business.  The business has adopted the following management structure. At the top of the structure there are the share holders, then the board of directors, the officers and the general employees.

This structure has a lot of advantages to us; first is the ability to raise capital through sale of shares. This is possible by floating our shares through stock offering, this ability sets this business structure different from others. This structures allows us to attract investors who are willing to own a share of the company, moreover, where employees are a also share holders it gives commitment to the employees and thus makes it easy to retain productive employees in the company for a long time.

Secondly, corporations have benefits associated with tax, in a corporation, no tax is paid on any profits retained by the corporation for the purpose of reinvesting or retained for any other purpose. Moreover corporations pay taxes at lower rates than some of other business structures. It is therefore beneficial and cost effective to operate a corporation than a sole proprietorship. The business is a separate entity from the owners and it is liable to pay all taxes resulting from annual profits, salaries paid to the workers and dividends paid to share holders.

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