Business Entities, Laws And Regulations Paper

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Business Entities, Laws and Regulations Paper The following paper will discuss two hypothetical businesses and the organizational structure that presents the best choice for each business with consideration for control, taxation, and liability issues. It will address the laws, regulations and risks each business must face. The paper will also include a discussion of a hypothetical situation in which a hiring manager must choose an applicant while considering laws, regulations, and the risks against which the business must protect itself when making the decision. Professional Practice Akiva and Tara are newly licensed as obstetricians and want to open a birth clinic together. They will need to take out a large loan to finance their start-up costs. Akiva and Tara would be best served by creating a limited liability partnership (LLP) to organize their business. By forming the LLP, the partners protect themselves from liability beyond their initial capital contribution should the partnership fail or face a lawsuit (Cheeseman, 2010). Members of an LLP are also not personally liable for the malpractice of one partner, and states require LLPs to carry substantial liability insurance in exchange for this limited liability. The limited liability protects Akiva and Tara from being held personally liable for the loan they will take out should the business become insolvent. Forming an LLP ensures that Akiva and Tara retain control of their business because they are the only shareholders. For tax purposes, an LLP is not taxed as a separate entity. Therefore, Akiva and Tara will only pay taxes for the business profits on their individual tax returns. To form their LLP, the women will need to write and file articles of partnership in the state in which they wish to operate (Cheeseman, 2010). If they choose to conduct business in another state, they will first need to

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