...Legal Forms of Business Law/531 Legal Forms of Business There are multiple legal forms of business including sole proprietorships, partnerships, limited liability partnerships, limited liability companies, S-corporations, franchises, and corporate forms. Entrepreneurs must assess concerns of liability, risks, and assets when considering these optional forms of business because each form has its own advantages and disadvantages. The following paragraphs illustrate specific scenarios where each form is justified as the preferred form of business for the situation through contextual advantages. Sole Proprietorship Brian, a struggling college student and musician, needs to find a way to pay off his student loans. He figures he could make some money in his spare time by teaching guitar lessons. A sole proprietorship would be the preferred form of business in this scenario because it is simple to form, empowers Brian with absolute control, is easy to dissolve/transfer, and avoids double taxation (Cheeseman, 2010). Under a sole proprietorship, Brian is taxed on his own personal income and is entitled to all profits, but also is burdened with financial responsibility and unlimited liability. However, this is still preferable considering he does not need the business to grow beyond himself and it is relatively unlikely that he will incur any significant business debts. Moreover, although he is limited to personal funds, he does not need to invest in much...
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...Legal Form of Business Paper Many different forms of business exist. Some of them are more common than others. Sole proprietorship, partnership, limited liability partnership, limited liability company, S corporation, franchise, and corporate form are the seven forms of business that we are going to discuss in this paper. We are going to develop scenarios in which each of these forms of business would be the preferred form and justify why the corresponding business form would be most preferable. A sole proprietorship is the simplest form of business (Cheeseman, p.530). It involves a single person wishing to start a business. . A partnership involves two or more people to carry-on a business as co-owners for profit (Cheeseman, p.533). An example of this could be that two people decided they would like to open a car washing business together. The best business model for the two of them would be to decide on a partnership. This business form would give them equal rights and equal responsibilities within the business. As long as each of them understands that they are partners and need to share the expenses and responsibilities that come with the business then a partnership would be the best model for their business. A limited liability company (LLC) is a form of business where owners have li A limited liability partnership (LLP) is a form of business that provides each of its owners with a limited personal responsibility (nolo.com, 2011)...
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...Legal Forms of Business Legal Forms of Business Entrepreneurs face a difficult decision in choosing a legal form of business. The preferred form of entity is dependent on many relative factors, such as the type of organization and business environment. Different forms of legal businesses have different tax, investment, and financial implications. The best-suited business calls for a thorough analysis of pertinent facts before making a decision – requiring some careful planning and strategy. This study provides an analysis of seven forms of legal business. Sole Proprietorship Sole proprietorships are fairly simple and inexpensive to create and operate. Legally, a sole proprietorship is inseparable from its owner, and therefore the owner is personally liable for business debts (Cheeseman, 2010). The tax implications for a sole proprietorship are simple. The business owner reports profits and losses on their personal tax returns. Sole Proprietorship is the preferred form of business in establishing or operating a small business where personal liability is not a big concern. Sole proprietors own businesses in many industries. Some of the more common sole proprietorships are landscaping services, housecleaning services, independent writing services, and tutoring services. * Landscapers tend to work alone or hire a small team of employees, providing landscaping services to homeowners and businesses. Sole proprietor may take on independent contracts and projects...
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...Law 531/ Business Law Legal Forms of Business As an entrepreneur one of the most important decision to make, when starting a business is the legal form of the business. In making this decision many factors are taken into consideration, such as financial resource for business, government rules and regulation, and personal liability. In this paper a discussion regarding the different forms of business including scenarios of these form and explanation on why this corresponding business form is preferred. Sole Proprietorship According to Cheeseman (2010), a sole proprieship is the simplest form of business organization and there is no separate legal entity. (p. 530). Under sole proprietorship the business is owned and executed by a single person. The proprietor makes all the management decisions and has authority to receive profits. Sole proprietorship business could easily be sold or transferred if the owner choose, no other approval is necessary. Scenario: A small neighborhood businesses, sometimes called, neighborhood store, are an example of sole proprietorship. Creating a sole proprietorship is easy and low cost with no government approval is required at the federal and state level. A license to do business within the city is required at the state level. This form of business is excellent for a person with limited amount of money to start a small business, Sole proprietorship is responsible for business’s contract and torts committed, The sole proprietorship has...
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...Business Law 531 Legal Forms of Business Lyneeta A. Johnson University of Phoenix October 1, 2012 Christine Benway Legal Forms of Business Starting a business is an exciting event for a business owner; it signifies the beginning of a business venture expected to be successful. Choosing an industry, identifying the target market, and developing a business strategy can be time consuming, however; the rewards outweigh the work. Deciding what legal form of business to operate can be a difficult decision for entrepreneurs because of the requirements that must be met for each legal form of business. Following is a discussion about the different forms of business. A scenario simulation for each form of business including justification for the preferred business form is also present. Sole Proprietorship According to Cheeseman (2010, p. 529) “an entrepreneur is a person who forms and operates a business.” An entrepreneur starting a business independently is a form of sole proprietorship. The owner of the business is the sole proprietor. A recent college graduate who opens a mobile dog grooming service is an excellent example of a sole proprietorship. The graduate who has experience with animals from walking dogs in the neighborhood to gain extra income would be ideal...
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...Legal Forms of Business LAW 531 Legal Forms of Business The first step in a new business is to decide how the business will be structured and the first executive decision will be to choose what type of business organization is the best. There are a number of legal forms that a business can take but to make that choice the following should be taken into account. For example: the size and scope of business, the level of structure, the level of control, tax matters, profit or loss of the business, re-investment issues, etc. There are several legal forms of business: sole proprietorship, partnership, limited liability partnership, Limited Liability Company, corporation, S corporation. Sole proprietorship In a first scenario a handyman who wants to get into business which will have little paper work and set up cost. The entrepreneur doesn’t have a partner and will be running the business alone. For this scenario the best business form will be sole partnership. This is a business with one owner which means the owner and business are inseparable. In other words the owner is the business and the business is the owner. The majority of small businesses start out as sole proprietorships because it has some advantages. • sole proprietorship is easy to form and operate • least expensive form of ownership to organize • owners are in complete control, and may make decisions by themselves • the owner receives all income generated by the business • it is easy dissolve the business...
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...Legal Forms of Business When considering the preferred legal form of business, it comes down to the level of liability, the size of the business and the number of owners or shareholders that will be involved. It is important to consider that with the increased size of a business and the increase in the number of owners, the decision-making process becomes more complex. The level of liability for the owners decreases as the owners no longer are liable for the losses and gains of the business within larger legal forms of business. Of the legal forms of business; sole proprietorship, partnership, limited liability partnership, limited liability company, S corporation, franchise, and corporate; some businesses may only qualify to be classified as one or two of the legal forms of business, making the decision easier for the owners to choose. Sole proprietorship: A sole proprietorship is a for-profit business owned by one person who may operate the business alone or employ others. The sole proprietor of the business is responsible for assets, losses, and debts. There is also no legal distinction between the sole proprietor and the business (Cheeseman, 2012). A small business, such as a coffee shop would be a prime candidate for a sole proprietorship. The owner could run the coffee shop alone or employ others to operate the business. A sole proprietorship can be more difficult to raise long-term capital for, because of unlimited liability and that the business depends...
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...Individual Paper: Legal Forms Of Business with Supporting Scenarios Chanel Moore-Bass Law/531 Business Law March 19, 2012 Carmina Perez-Fowler, UOPX Faculty Online Week Two: Individual Paper: Legal Forms Of Business with Supporting Scenarios There are seven major forms of business: sole proprietorship (sole trader), partnership, limited liability partnership (LLP), and limited liability company (LLC), subsidiary or subchapter corporation (S), franchise, and corporate/company (C- traditional). The various forms of businesses are established and recognized by state laws. To determine the type of business form to use, it is important to know the differences, advantages, and disadvantages. Sole trader/proprietor is the clearest and simplest form of business to establish. It is just one owner, debt/tax liabilities fall on the owner, the income (profits/losses) reports on personal tax return. Examples of sole proprietorship are franchise, self employment, and independent contractor. Advantages are total autonomy of the business, no legal procedure to setup, no set hours/wages, and no shareholders. Disadvantages are if owner dies the business dissolves, full responsibility of tax/debt liabilities, difficulty obtaining long-term financing, and personal liability if sued. General partnership is more than one owner, involving verbal or oral agreement but not filing paperwork to create a specific entity, such as a corporation or LLC, either partner can bind the business to a contract...
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...Legal Forms of Business Law 531 April 5th, 2012 Legal Forms of Business Once one makes a choice to start a business, the next decision is under which legal form that business should operate. The selection is dependent on factors like the ease and cost of creation, the capital necessities, management style, government limitations, personal liability, and tax considerations (Cheeseman, 2010). It is important to make sure whichever legal form of business one chooses is in line with the best interests for his particular venture. The following will provide a basic scenario in which a business owner needs to decide which legal form of business best suits his or her needs along with an explanation of that choice. A sole proprietorship is the least complex business form. Scenario: Lucas just graduated from college with a degree in art. He has long wanted to be an interior decorator. He has student loans to pay back, but feels as though he can provide decorating services to consumers and make some money. He does not know anyone with an art background, so she will be providing these services alone. In the scenario above, it would be appropriate for Lucas to start a sole proprietorship. This form is cheap and easy. Lucas does not have a lot of money and he is eager to get started quickly. Quick start up is achievable because there are essentially no formalities. Aside from obtaining a license that is required in some local governments, no state or federal approval is necessary...
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...Legal Forms of Business Michelle Impellizzeri LAW/531 January 21, 2012 J. Thomas Witek, JD Legal Forms of Business To start a business, choosing the best form of operation will depend upon the type of business the owner wants to undertake. When selecting a form of business the owner should ensure that the form best meets their needs. “The selection depends on many factors, including the ease and cost of formation, the capital requirements of the business, the flexibility of management decisions, government restrictions, personal liability, tax considerations, and the like” (Cheeseman, 2010, p. 529). The major forms of business organizations are, sole proprietorship, partnership, limited liability company, limited liability partnership, corporation, S corporation, and franchise. This paper will define these forms and provide individual scenarios of each and why they were chosen. Sole Proprietorship “A sole proprietorship is the simplest form of business organization. The owner of the business, the sole proprietor, is the business” (Cheeseman, 2010, pg. 530). An example of a business that would benefit from sole proprietorship would be someone who creates floral designs and sells them for a profit. In this scenario, sole proprietorship would be the optimum business form as it is the easiest business to establish and does not cost a lot. As the sole proprietor, the owner has the rights to make all business decisions, to include staffing, merchandise pricing, and hours...
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...LEGAL FORMS OF BUSINESS Legal Forms of Business Law/531 April 12, 2012 Robert Payne Legal Forms of Business Choosing the proper business organization structure is one of the most important decisions that a business owner must make. The type of organization will determine how the business handles tax matters and whether there is protection against personal liability. A business owner should consider several factors in choosing a business structure, including the number of individuals in the business, type of business, profitability of the business and insurance. In this paper I will explain the legal forms of business, sole proprietorship, partnership, limited liability partnership, limited liability company, S corporation, franchise, and corporate form. I will develop a scenario explaining each form of business and why it was chosen. Sole Proprietorship “A sole proprietorship is the simplest form of business organization. The owner of the business, the sole proprietor, is the business” (Cheeseman, 2010, Business Ethics and International Issues, pg. 530). For example, an individual who makes and sells jewelry for a profit would benefit from being a sole proprietorship. It is the easiest business to form, does not cost a lot, and must be registered with the Secretary of State. The sole proprietor would own all the business, have the right to all the profits, and will not pay taxes on the business because sole proprietorships are not separate legal entities...
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...Legal forms of business Legal forms of business University of Phoenix Law/531 Week 2 Donna McKenzie Stanley P. Santire March 17, 2012 Literature reporters stated that business preferences are based on availability in states of residences based on the preferred structure (Fordham Urban Law Journal, 2005). Prior to January 1, 1998, availability for individual business ownership was limited to SP (Sole Proprietorship) or corporations. The amendment of the limited liability company act now makes it permissible for a one person LLC (Limited Liability Company). (AAES Project, 1998). After reviewing the options for a business structure, I made the decision to be a sole proprietor. A $10,000 capital investment was placed in the business and the business was started. A large profit was made in the first year and the gain was reinvested in the business. The sale of nursing uniforms continued to grow and started to attract investors but these were turned down because my sole ownership does not require the rental of a building. Marketing is done by tweets, fax or other technological methods by the customers. This, in turn, attracts new business, both from organizations and the public. A preferred form of business for proprietorship is for small businesses similar to mine. The main reason for the choice of sole proprietorship is the size of the business. The advantages gained for this type of business include ease in starting the business, low legal fees, minimal paperwork and...
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...Legal Forms of Business Mike Robertson LAW531 May 7, 2012 Julie Benes Legal Forms of Business The well-informed businessperson understands choosing the correct business form is important. The type of business form determines what type of business organized, how money flows in and out of the business, how the business and owners are taxed, and the levels of risk to owners. There are several types of business forms. These types are sole proprietorship, partnership, Limited Liability Partnership (LLP), Limited Liability Company (LLC), S Corporation, franchise, and corporation. The businessperson needs to have an understanding of which business form is justified for their business startup. The beginning businessperson looks at the sole proprietorship a majority of times because of its simplicity (Anthony, 2011). A sole proprietorship is the simplest form of business organization. The owner of the business, the sole proprietor, is the business. There is no separate legal entity. Sole proprietorships are the most common form of business organization in the United States (Cheeseman, 2010). One example of a business that becomes a sole proprietorship is an independent contractor. The future business owner completes work for a business, but they are not an employee of these companies, they are considered self-employed and therefore a sole proprietor. Most person call this “moonlighting.” For example, if an electrical contractor with a full-time job also does home electrical...
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...Legal Forms of Business Paper University of Phoenix LAW/531 Aaron Gershonowitz November 7, 2011 Legal Forms of Business There are many different forms of business in today’s society. They run from sole proprietorship to corporate form. When someone wants to start a business, he/she has to decide what form of business he/she wants to be a part of. Of all the forms of business out there, this paper will be discussing seven of them, along with scenarios that each of these seven forms would be preferred. The forms of business being discussed in this paper will be: sole proprietorship, general partnership, limited liability partnership, Limited Liability Company, S corporation, franchise, and corporate form. Sole Proprietorship A sole proprietorship is a business that is owned by one person. Someone new to the business world would want to start out having this type of business if he/she wants to keep the business small. There are several major advantages to operating a business as a sole proprietorship, and they include the following: • Forming a sole proprietorship is easy and does not cost a lot. • No federal or state government approval is required. • The owner has the right to make all management decisions concerning the business, including those involving hiring and firing employees. • The sole proprietor owns all of the business and has the right to receive all of the business’s profits. • A sole proprietorship can...
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...Legal Forms of Business Sole proprietorship The sole proprietorship is the oldest, most common, and simplest form of the business. Also known as a sole trader, is a type of business form that is owned and manage by one person and in which there is no legal difference between the owner and the business. The owner receives all profits and has full responsibility for all losses and debts. The proprietor owns every asset of the business and all the business liabilities are the proprietor’s. A sole proprietor may use a business name other than his or her legal name. The Advantages Mainly the reduced cost of a business, easier and cheaper to start and discontinue without high cost and legal expenses; and easier management, and the owner have exclusive control, a Sole proprietorship is extremely challenge that inspire the individual for more success in his life. A sole proprietorship is a good business organization for an individual starting a business that will remain small, does not have great exposure to liability, and does not justify the expenses of incorporating and ongoing corporate formalities. (Iowa Secretary of State, 2011) Partnership A partnership is the relationship existing between two or more persons who join to carry on a trade or business. Each person contributes money, property, labor or skill, and expects to share in the profits and losses of the business. (IRS.gov, Sept 2010). In another words, a partnership is an arrangement where two or more people...
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