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Legal Issues for Business Organizations

In: Business and Management

Submitted By kbow
Words 4602
Pages 19
Katelyn Bowerman
000311726
310.1.2-01-06

Part A
There are many different types of business forms for your company to convert to. Below I will discuss the six types, their characteristics, advantages and disadvantages. I have concluded that there is one piece of generalized advice I can give for all of these types, and that is preparation for all owners involved, no matter the role. In the event of a death, or a decision to leave the business, you should make sure that at the forming of the business, that everything is in order for all parties involved and the smooth continuation of said business. Running a business can be an exciting endeavor, but I would recommend to anyone before they start, to have everything legally in order for all the different kinds of situations you can find yourself in.
Sole Proprietorship- The simplest form of business, a sole proprietorship is the most common form of business in our country. Be it because it can be managed by a single person; or perhaps it’s the lack of agreements and formalities needed for the business to run, sole proprietorships are able to operate on a small scale and responsibilities fall on only one person. In a sole proprietorship, only one person is needed for the capital and credit to start the business, and possibly that’s why we American Dreamers have turned it into the most common form of business used in this great country. What distinguishes this form from the rest, is the unshared responsibility of the owner.

Characteristics of a sole proprietorship, to be considered by the owner:

Liability, The owner of a sole proprietorship has unlimited personal liability, however the sole proprietor can insure against most risks and operate with near the same level of comfort as the owners of a corporation.

Income Taxes, a sole proprietorship has as pass- through taxation, meaning the…...

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