Legal, Social, and Economic Environments of Business
American Intercontinental University
LEGAL, SOCIAL, AND ECONOMIC ENVIRONMENTS OF BUSINESS 2
There are three types of businesses: Sole Proprietorship, Partnership, and Corporation. Bases on the scenario represented in this paper, a sole proprietorship is the smartest decision when starting this business. The inventor has a product that he thinks will succeed, but does not have the funding to really back his product. The economy also does not help his situation and the only way to get started is to start small and when the product hits and begins to sell, and then expand the business.
LEGAL, SOCIAL, AND ECONOMIC ENVIRONMENTS OF BUSINESS 3 There are three major business types and each with there own advantages and disadvantages. There is a sole proprietorship which has one owner and operator. There is a partnership which has two or more owners in which where the financial burden is split between them. The last is a corporation in which are businesses that have property rights and separate status from the owners, and they are financially responsible. A sole proprietorship is mainly small businesses which are owned and operated by one individual. Some advantages of a sole proprietorship are: freedom to be your own boss, easy to form, and low start up costs. Now of course there are disadvantages which are: being personal responsible for all debts of the business, and it is difficult to borrow money for start up costs or expansions. A majority of the major corporations or businesses that you find in this day and age, at one time started as a sole proprietorship. Every business starts small at some point and then when it gets enough sales and revenue to expand is when you go to a partnership or become a corporation. A partnership has
References: Ebert, R.J., & Griffin, R. W. (2005). Business essentials. Upper Saddle River, NJ: Pearson Prentice Hall.