Types Of Business Forms Sole Proprietorships,...

BUSINESS 4000 TEST 2 Submitted to: Prof. Heather Clarke Submitted by: Jordan Loder (Student no. 201213535) Date: July 21, 2016 INTRODUCTION When an individual chooses to start a business there are several business forms they may choose to take. The option that they chose to depends on several factors such as how much control an individual wishes to have within the organization and to what extent are they willing to be liable for the business’s actions. This paper will look at three types of business forms: sole proprietorships, partnerships and corporations. After each form is examined a recommendation will be made to James regarding which type he should choose. SOLE PROPRIETORSHIP A sole proprietorship is an unincorporated business with only one owner. If James chooses to select this option his role as the owner of the business would mean that the business would be considered the same legal entity as him. In this form, James would have unlimited liability for the business’s actions. This means that the organization’s contracts are the owner’s contracts and the organization’s assets and debts are the owner’s assets and debts as well. If the business cannot cover its debts not only can the business’s assets get taken as payment, James’ personal assets can be taken as well. Some advantages of this form include its simplicity of structure and the resulting simple decision making because one person can make decisions unilaterally. In this scenario, this structure would allowShow MoreRelatedEssay on Legal Forms of Business939 Words   |  4 Pagesperson has an innovative plan to start a business. It begins with an idea but what should they do afterwards. If someone wants to start a business they must ask themselves several questions. What is the size of the business? What level of control do they want to have? What are the business risk and vulnerabilities? What are the initial startup expenses? 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