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Research Proposal Sample: Advantages of Incorporating a Small Business



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.

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Argument breakdown

This essay argues that setting up an incorporated business has several advantages. The writer presents three benefits. The main advantage is “the issue of the limited liability.” Another advantage is “corporations are better placed than sole proprietorship.” The final benefit is “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.

Argument analysis

The essay should explore the main advantages of incorporated businesses.  Benefits should be explained and supported with strong sources. The writer can highlight the benefits by making comparisons between an incorporated business and other business types.


The introduction explains what an incorporated business is. This is great background information. It is common to explain key terms in the introduction of academic papers so the reader can follow the rest of the essay.

The introduction does not contain a clear thesis statement, however. A thesis statement is the writer’s answer to the question and reveals the main argument of the essay. Moreover, you can outline the main topics you’ll explore. The introduction mentions three reasons incorporated companies are beneficial. However, only one reason is discussed in the essay.

Body paragraph 1

Argument - The paragraph begins with the topic sentence “The main advantage associated with incorporating a small business is the issue of the limited liability.” This is an appropriate argument to make, and the writer includes a source to lend weight to their claims.

Reasoning - The writer is effective at explaining the concept by comparing it with another business type -- a sole proprietorship. Therefore, the first benefit of forming an incorporated company is understandable to the reader.

Body paragraph 2

Argument - An incorporated company “has an unlimited life span and continues to exist even after the shareholder leaves, dies, or if the ownership changes.” The writer has added another relevant supporting point.

Reasoning - The writer does not explore this point enough. Additional supporting information in the form of data and examples would drive the point home. Why does the business have an unlimited lifespan? What laws or legislation allow the business to continue indefinitely?

This topic is not mentioned in the introduction. On the other hand, the topic of the first body paragraph was stated. Coherence of the essay declines as a result.

Body paragraph 3

Argument - The topic is “Corporation have greater capacity to raise money making it easier for the business to grow and expand.” The writer has done well to include a third unique supporting point.

Reasoning - The writer explains why it is easier to raise money and includes two points supported by sources.

The main point of this paragraph was also omitted from the introduction. Since one main point was outlined in the thesis statement, the two subsequent points should have been included too.

Analysis summary

The writer has presented a good argument by including unique supporting information in each body paragraph. They have included sourced material to strengthen their claims. As a result, the essay argument is explored well.

We need to edit essay because of a weak thesis statement. Furthermore, ideas could be investigated further -- body paragraph 2 is too short, for instance. Finally, the reader would benefit from a conclusion to sum up the thesis and main points of the essay.

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