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Legal Forms of Business

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Legal Forms of Business

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  • December 3, 2012
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Legal Forms of Business
Jamille Gabriel
University of Phoenix
Law 531
November 5, 2012
Craig Wellneitz

When it comes to the different forms of business, there are many different ways in which you can go about handling the logistics concerning profit, tax, and other legalities of your business. The different forms of business we have talked about in class thus far are, sole proprietorship, partnership, limited liability partnership, limited liability company, S corporation, franchise, and corporate form (C corporation). Sole Proprietorship is a form of business used when the owner is the actual business and there is no separate legal entity. For instance, if you were running your own home based daycare where you just want to create a business in which you would be watching a few children a few times a week. This would be a form of business that you could use. This would be the best form because the cost of formation is low, there are no aren’t a lot of formalities, there is no federal approval needed, and you will receive all profits. Partnership is a form of business with two or more people. Is this business form, the partners are personally liable for all debts and obligations. For instance, two people that make jewelry in the spare time have decided to go into business. They both put up money for supplies and generally create the jewelry together in their homes. A partnership would be the form of business that they would use because, there are no formalities generally required, the partnership doesn’t have to pay federal income taxes, and they have equal votes on all matters. Limited liability partnership, is where they invest capital, don’t participate in management, and aren’t personally liable for partnership debts beyond what they contributed. For example, a person has a construction business and someone wants to invest in the business, limited liability partnership would be the choice for this form of business because; the person investing...