Legal Forms of Business Paper
January 21, 2013
Jonathan Mc Govern
When seeking to operate a business or operation, there are several structures to take into consideration. With each one, there are advantages and disadvantages concerning profit, tax and other legalities. Some type of legal configuration must be adopted by any business to define the liabilities and rights of the people participating in the ownership, personal liabilities, financial structure, life span and control of the business. It is in the best interest of the business owner to form businesses that could optimize profitability, secure personal assets and minimize financial lost. When selecting the wrong form of nosiness, individuals risk losing assets in an effort to settle financial settlements and lawsuits. Within this paper, scenarios will be formed to demonstrate the different forms of business such as Sole Proprietorship, Partnership, Limited Liability Partnership, Limited Liability Company, S Corporation, Franchise and Corporate Form.
Sole proprietorship is defined by an individual or a married couple who is responsible for the day-to-day operation of the business. As the easiest way to form and run a business, sole proprietorship allows the business owner(s) to have ownership of all the business assets and profits that it generates while also taking full responsibility of any debts or liabilities inherited (Kenner & Speck, 2012). Samantha enjoys making earrings and bracelets. She has done really well for herself selling to her neighbors and friends. Samantha has decided to take her jewelry to the local beauty and nail salons to gain more customers. Sole Proprietorship would be the ideal forms of business for Samantha because it consists of a low cost formation and there are minimal formalities involved.
A partnership consists of two or more (non-married people) who share ownership of one business. Each partner shares the management, the...
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