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Busn 105

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THE BUSINESS ENVIRONMENT | Legal, Social, and Economic Environments of Business | | | | LaTia Hines | 10/9/2011 | |

ABSTRACT

In this paper, you will find information on the best choice of business entity for a new product that has excellent market potential. You will examine the pros and cons of each type of business structure. Business structures such as a Sole Proprietorship, Partnership, and Corporation, and ultimately why a corporation was the best business structure for this particular product.

A woman has an excellent idea for a new appliance that she feels will benefit the needs of everyday consumers. However, she has a few decisions that stand in the way of launching the product. She is not that business savvy, she has no managerial skills, knows nothing about manufacturing and more importantly, she does not have any capital to start-up. She is sure her products will fit consumer’s needs well, mainly because there is no other product on the market like it.
To establish her business the first thing she wanted to do was to declare the type of business entity she wished to have. Now given the elaborate list of things that she is lacking, no managerial skills, no business knowledge, no funding, and no way to make the product she knew that she could automatically eliminate sole proprietor as a choice.
As a sole proprietor, she would assume all responsibility and liability for funding her product and start-up, something she is lacking and has no means of acquiring on her own. She would be responsible for all decision making, including both managerial and financial, which are also two qualities that she does not have. For the reason that she is short of many needed skills this will also limit how her business will thrive. She is aware of the fact that her product has potential to be as successful as the “clicker” does, so that a

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