Business Entities Paper
Business Entities Paper
Trameka M. Alpough
BUS/415
January 31, 2011
Richard Simon
When starting a business it is important to choose the correct type of entity that will allow it to be successful. Upon choosing the best entity for the business there are different rules and regulations that need to be followed including issues from liability to taxation. Starting a business requires some research on licensing, state laws, and regulations. Opening a business requires choosing an entity, taking control, taxation methods, and liability issues. The most common types of business forms are sole proprietorship, partnership, corporation, and S corporation. Each type of business has its advantages and disadvantages when related to obtaining a start to a business, tax information, and liability. Lou and Jose are planning to open a sports bar and restaurants where customers can socialize and watch sporting events on large-screen televisions accessible throughout the bar. Lou and Jose are low on funds for starting the business but have a wealthy investor friend, Miriam, who is willing to be a silent partner within the business. Lou, Jose, and Miriam should choose to have a limited partnership with the restaurant and bar. “A partnership is a 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.” Lou, Jose, and Miriam will be business partners. It would be best to venture into this type of business as a limited partnership Lou and Jose will take care of the business operations relating to the business and Miriam will invest the money for the business to commence and be a general partner. Miriam will be a general because she will be a “partner who invest capital, manage the business, and are personally liable for partnership debts” (Cheeseman, 2010, p. 259). Miriam should allow Lou and Jose to keep control of
Trameka M. Alpough
BUS/415
January 31, 2011
Richard Simon
When starting a business it is important to choose the correct type of entity that will allow it to be successful. Upon choosing the best entity for the business there are different rules and regulations that need to be followed including issues from liability to taxation. Starting a business requires some research on licensing, state laws, and regulations. Opening a business requires choosing an entity, taking control, taxation methods, and liability issues. The most common types of business forms are sole proprietorship, partnership, corporation, and S corporation. Each type of business has its advantages and disadvantages when related to obtaining a start to a business, tax information, and liability. Lou and Jose are planning to open a sports bar and restaurants where customers can socialize and watch sporting events on large-screen televisions accessible throughout the bar. Lou and Jose are low on funds for starting the business but have a wealthy investor friend, Miriam, who is willing to be a silent partner within the business. Lou, Jose, and Miriam should choose to have a limited partnership with the restaurant and bar. “A partnership is a 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.” Lou, Jose, and Miriam will be business partners. It would be best to venture into this type of business as a limited partnership Lou and Jose will take care of the business operations relating to the business and Miriam will invest the money for the business to commence and be a general partner. Miriam will be a general because she will be a “partner who invest capital, manage the business, and are personally liable for partnership debts” (Cheeseman, 2010, p. 259). Miriam should allow Lou and Jose to keep control of
References: Cheeseman, H. R. (2010). The Legal Environment of Business and Online Commerce: Business Ethics, E-Commerce, Regulatory, and International Issues (6th ed.). Upper Saddle River, New Jersey: Prentice Hall. http://www.allbusiness.com/glossaries/franchise/4951534-1.html http://www.irs.gov/businesses/small/article/0,,id=98214,00.html