Legal Forms of Business
Legal Forms of Business
Tim Yeakley
AIU Online
Abstract
There are three different legal forms of business and all vary in levels of liability, ownership, and P&L control. An inventor who has developed a new product needs to determine the proper form of business to establish. The inventors’ situation is unique and narrows his choices of business types due to his lack of financing, business skills, and family. The three types of business he would have to research are sole proprietorship, partnerships, and corporations. Each type of business has advantages and disadvantages depending on the specific needs of the business owner(s). The inventor should consider the limited partnership business type as this would, provide resolution to his need for experience, financing, family time, and marketing.
Legal Forms of Business A stay-at-home family man and inventor has discovered an idea that would enhance the home appliance industry. The inventor is being faced with several issues about starting his own business and will need to understand the Legal Forms of Business before proceeding to the next step. The inventor has no business skills, lack of startup funding, lack of manufacturing experience, and does not want to disrupt his family life. There are three different forms of business ownership that we will discuss and there are pros and cons to each.
The first form of business we will discuss is the sole proprietorship. A sole proprietorship form of business ownership can be defined as a single person who owns the business. Some of the pros to this type of business ownership include, being the single decision maker and receiving all of the profits from the business. Some of the cons to this type of business can include that all liability falls on the individual owner as well as all debts. With the inventor having little wealth, it may not be financially possible for him to form this type of business and having a family could take time away from his
Tim Yeakley
AIU Online
Abstract
There are three different legal forms of business and all vary in levels of liability, ownership, and P&L control. An inventor who has developed a new product needs to determine the proper form of business to establish. The inventors’ situation is unique and narrows his choices of business types due to his lack of financing, business skills, and family. The three types of business he would have to research are sole proprietorship, partnerships, and corporations. Each type of business has advantages and disadvantages depending on the specific needs of the business owner(s). The inventor should consider the limited partnership business type as this would, provide resolution to his need for experience, financing, family time, and marketing.
Legal Forms of Business A stay-at-home family man and inventor has discovered an idea that would enhance the home appliance industry. The inventor is being faced with several issues about starting his own business and will need to understand the Legal Forms of Business before proceeding to the next step. The inventor has no business skills, lack of startup funding, lack of manufacturing experience, and does not want to disrupt his family life. There are three different forms of business ownership that we will discuss and there are pros and cons to each.
The first form of business we will discuss is the sole proprietorship. A sole proprietorship form of business ownership can be defined as a single person who owns the business. Some of the pros to this type of business ownership include, being the single decision maker and receiving all of the profits from the business. Some of the cons to this type of business can include that all liability falls on the individual owner as well as all debts. With the inventor having little wealth, it may not be financially possible for him to form this type of business and having a family could take time away from his
References: Paul, F., (2011). Advantages and Disadvantages of Sole Proprietorships. Retrieved from http://www.allbusiness.com/business-planning/business-structures-sole- proprietorships/2512-1.html Paul, F., (2011). Advantages and Disadvantages of General Partnerships. Retrieved from http://www.allbusiness.com/business-planning-structures/business/2513-1.html Paul, F., (2011). Advantages and Disadvantages of Forming a Corporation. Retrieved from http://www.allbusiness.com/business-planning/business-structures-corporations/686- 1.html Murry, G., (2011). Which Business Type is Best? What is the Difference Between Business Types? What does LLC, LP, LLP, PC, S-corp Mean? Retrieved from http://biztaxlaw.about.com//od/businessorganizationtypes/tp/businesstypes.htm