Preview

Basic Legal Environment

Satisfactory Essays
Open Document
Open Document
371 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Basic Legal Environment
BY
VERNELL BECKUM
AIU
01/08/2011

Brief of Scenario

Regarding the scenario the best way to go in that situation will be a partnership. The reason for that being, it cause he has little financial skills and management skills. From what I know regarding starting a business. If you do not have the skills or do not know much about the process, then you will need help starting and running the business. Everyone has their own way to of doing things so that decision it really you to you. Just make sure that you make the right one for you and your family.

Abstract This paper will address the issues of sole proprietorship, partnership, and corporation. This will discuss the advantages and disadvantages for all three. This will also discuss which will be the best way to go when starting a business and why.

There some advantages and disadvantages to each type of business. Depending on how much say the owner wants to have in the decision making of the business. If it was I starting a business the best would be corporation or ever better a Limited Liability Corporation (LLC). The reason for that being is that if anything happens to the business the liability does not fall back on you. There will be hard getting help with the start up cost, because with this type of business in the beginning, creditors will use individual for credit situations. Out of the three types of businesses, the best would be Sole Proprietor because the owner has 100% of all decisions and it is easy to start up, even though all debt falls back to the owner personally. This would be to the best way if you are starting up a new business. As you grow you can easily which it over to a partnership or corporation.

Conclusion When starting up a business there are many decisions the make and questions to be asked. If you do not make the right one it can come back on you in the long run. I have learned a lot from starting my businesses that I have started in the past. Now I have a

You May Also Find These Documents Helpful

  • Better Essays

    Lit1 Task 310.1.2-01-06

    • 2847 Words
    • 12 Pages

    Sole Proprietorship Sole proprietorship is the most common form of business in the United States. It is a relatively simple way for an individual to start a business since legal costs and business requirements are minimal, and the owner has complete control over the business. Though a sole proprietor is not responsible for any corporate tax payments, the owner is responsible for taxes incurred on the income generated from the business as part of his or her personal income tax payments, and personally shoulders any other risks or obligations. A sole proprietor may also choose to file their business under a fictitious business name or a DBA (doing business as), allowing him or her to operate and market the business under a more typical business name rather than their personal name. However, the business is not considered a separate entity and the sole proprietor is still personally liable for all obligations incurred by the business. Characteristics to keep in mind about Sole Proprietorship 1. Liability There is a lack of protection from personal liabilities, meaning that the personal assets of a sole proprietor is at risk in the event of litigation. If the business fails, any creditor can go after the business assets of the business as well as the personal assets of the owner. 2. Income Taxes The business owner is responsible for paying taxes on all profits generated by the business as personal income and does not need to do a separate corporate tax filing. The proprietor can also reduce his or her taxable income by charging off business expenses. 3. Longevity or continuity of the organization Since finding a source of funding is one of the biggest challenges a sole proprietor may face, it hinders the business to have longevity or continuity. In most cases, the funding comes from the proprietor's limited personal assets which can inhibit the future growth of the business. 4. Control The sole proprietor has full control of all the business decisions and can expand,…

    • 2847 Words
    • 12 Pages
    Better Essays
  • Satisfactory Essays

    Res 351 Week 1

    • 881 Words
    • 4 Pages

    Many small businesses choose sole proprietorships for their business structure. A single owner is responsible for the business and retains all profits. The procedure to start a sole proprietorship is relatively easy. The amount of paperwork is much less than other types of businesses, and there are fewer regulations to follow. One disadvantage for this form of business structure is unlimited personal liability for the debts and liabilities of the business.…

    • 881 Words
    • 4 Pages
    Satisfactory Essays
  • Good Essays

    Business Organization

    • 623 Words
    • 3 Pages

    The last two options aren’t very appealing. A sole proprietorship would apply to us because there is more than one of us. Also these types of companies only exist as far as their success goes. A partnership, where two are more people pool their talent and capital and establish a company where they are the stockholder and the owner. This type of company can be taken “public” at any time and offers the option of adding more partners later on.…

    • 623 Words
    • 3 Pages
    Good Essays
  • Better Essays

    Small Business Idea Paper

    • 1332 Words
    • 6 Pages

    This type of organization is one of the most common for small businesses. This type is controlled by one person for all of the company’s needs—management and operations. This business type is unincorporated and one of the easiest and least expensive to start. Other advantages of a sole proprietorship are that all income generated goes directly to the owner to keep or reinvest, and the business is easy to dissolve, if necessary. Some disadvantages are that the owner is responsible for any incurred debt against the business and personal assets are at risk. Also, raising funds is difficult and are often limited to personal funds or consumer loans.…

    • 1332 Words
    • 6 Pages
    Better Essays
  • Satisfactory Essays

    University Of Phoenix

    • 655 Words
    • 3 Pages

    There are three types of business structures, partnership, sole proprietorship and a general corporation. Each structure has its disadvantages and advantages but the key is doing the research to determine which business structure will be suitable for your business venture. Many people may not be interested in running a small business so a sole proprietorship may not be the favorite structure to start with, or maybe when starting a business you may want your company to start small but eventually run as a corporation. Whatever the case may be one must understand the advantages and disadvantages of each structure.…

    • 655 Words
    • 3 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Legal Environment

    • 544 Words
    • 3 Pages

    First off Company X would bring the lawsuit to a State Trial Court of General Jurisdiction. These courts hold a wide variety of cases such as civil disputes and criminal prosecution. Although if Company X is planning on suing for less than 5,000 dollars they may bring the case to a Small Claims Court.…

    • 544 Words
    • 3 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Lit1

    • 493 Words
    • 2 Pages

    I cannot recommend continuing as a Sole Proprietorship or to start operating as a Partnership based on the concerns listed above. Neither of those business types will address the liability, profit, or continuity issues.…

    • 493 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Unit 1

    • 868 Words
    • 4 Pages

    This paper is about an inventor who is trying to start up their own business but does not have the financial stability nor the management skills to keep the business afloat. They also need to decide which type of ownership will best fit their business: Sole Proprietorship, Partnership or Corporation.…

    • 868 Words
    • 4 Pages
    Good Essays
  • Good Essays

    In today’s economy there are many decisions business owners have to make in order for their business to sustain and grow. With that being said, business owners are now looking at the operations and structure of their business more frequently and carefully. Deciding location, the type of business, the finances to operate this business, has become a bigger decision when it comes to wanting to develop an operating business. This paper will define Limited liability corporations and partnerships, and explain roles of limited liability corporations and partnerships. This paper will then provide information based on my evaluation on what circumstances would I choose one instead of the other?…

    • 965 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Fin515 Week 1

    • 1390 Words
    • 6 Pages

    A business may start as a sole proprietorship, or a partnership. These are where the business is owned by one person, or partners. The advantages that lie with these types are that they are easily formed, they are subject to few government regulations, and its income is not subject to corporate taxation (Ehrhardt,7). The disadvantages to these are that it may be difficult to raise capital to grow, the proprietor or the partners have personal liabilities for the business’ debt and the business is limited to the life of the proprietors (Ehrhardt, 7)). As the need for more capital rises business may decide to incorporate. The advantages to this are unlimited life, easy transferability of ownership interest and limited liability. The disadvantages to having a corporation is that corporate earnings may be taxed at double the rate, the process to set up a corporation is more complex and time-consuming than other types (Erhardt, 8).…

    • 1390 Words
    • 6 Pages
    Good Essays
  • Better Essays

    BizFilings.com. (2012, May 24). Sole Proprietorships and General Partnerships Are Risky Business Forms. Retrieved May 18, 2014, from bizfilings.com: http://www.bizfilings.com/toolkit/sbg/run-a-business/assets/sole-proprietorships-general-partnerships-risky.aspx…

    • 1508 Words
    • 5 Pages
    Better Essays
  • Powerful Essays

    Legal Environment

    • 2023 Words
    • 9 Pages

    “A travel agency is a middleman—a business or person selling the travel industry’s individual parts or a combination of the parts to the consumer.”(Charles R. Goeldner, J.R. Brent R, Robert W. and Mcintosh, pp193). Travel agent, working as a middleman, does their work like communicating with suppliers like hotels, tour buses, or tour operators, receiving commission from suppliers.…

    • 2023 Words
    • 9 Pages
    Powerful Essays
  • Good Essays

    Legal Environment

    • 693 Words
    • 3 Pages

    Common law is found mainly in countries with a history as British territories. An important factor of common law is ‘limiting’ governmental power. Common law relies mainly on customs and precedent (‘model’ or previous cases), thus making the decisions made by judges today binding on future legal decisions. This makes it harder to change laws, thus promoting a sense of security for the people.…

    • 693 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    Explain how the potential return and risk of a business are affected by its form of ownership.…

    • 2502 Words
    • 11 Pages
    Powerful Essays
  • Good Essays

    The first decision that the entrepreneur must make is what type of business he/she wants to start. The decision should be based on the amount of knowledge and skill that they have in the field that they are considering. The better that they know the industry, the stronger there likelihood they will have a successful business. THESIS. Business can operate under three legal structures which are: Sole-proprietorship, Partnership and a Corporation. The understanding of these is crucial to the decision of which structure is the best one for the entrepreneurs business. In a sole-proprietorship, the owner retains total control of all the decisions that need to be made. The ability to raise capital is limited by the financial resources and the credit worthiness of the individual owner. The owner has the ultimate liability for all the actions and debts of the business. A sole-proprietorship is not a separate taxable entity. The individual owner reports business revenue, expenses and net income (or loss) on his/her individual tax return form. The business ends with death of owner unless previously sold or transferred.In a partnership, the control is shared by the partners in accordance with the partnership agreement. If there are two partner¡¦s the agreement does not have to be fifty-fifty. It can be what ever the two decide on in the beginning. The ability to raise capital is expanded somewhat as partners are able to pool their respective financial resources. Both partners have joint and several liabilities for actions and debts of partnership. The partnership is not a separate taxable entity. An information return must be filled out each year to report partnership activity; however, individual partners report their respective shares of income (or loss) personally. The business ends with death of a partner unless written partnership agreement contains transfer conditions.With a corporation, the day-to-day control rests with the hired…

    • 683 Words
    • 3 Pages
    Good Essays