Business Law 531: Legal Forms Of Business

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Legal forms of business paper Jessica Gonzalez Law/531- Business law February 27th David Weischadle, II America is a free country that has evolved with time. In America one will find a number of types of organizations that conduct business in different forms. An organization has the right to choose what form of business the business will use. Organizations can choose from; sole proprietorship, partnership, limited liability partnership, limited liability company, S corporation, franchise, and corporate form. Different business forms are available as an attempt to fit the needs of every organization. The first business form an organization can choose from is a sole proprietorship. A sole proprietorship is, ‘the simplest form of business…show more content…
A franchise is a form of business organization in which a firm already has a successful product or service, ("Investorsword.com", 2012). The franchisor then enters into a continuing contractual relationship with other businesses for the use of their product or service for a fee. A franchise would be an excellent choice for an individual who has the funds to start up a business. Starting up a business is a high risk taker because one doesn’t know what to expect. With a franchise the risk is somewhat lower because the business has already proven itself to be successful. Thus, if an individual want’s to make a profit and not risk much of its investment a franchise is the perfect formation to…show more content…
In order for a corporation to become incorporated it must follow the general corporation of the state. An advantage of a corporation is that it is its own legal entity and thus does not hold any legal or monetary liability on its shareholders. In a limited liability partnership, the partners are only liable for the amount of monies invested in the organization, however that is not the case with a corporation. In a corporation the share holders bare “NO” liability at all. The downfall of a corporation is that of double taxation. Nonetheless, having an organization be it’s own entity may outweigh the con’s of having the organization be double taxed. A perfect example of a business that may wan’t to become incorporated would be a bar. A bar has a high risk of liability and, so a bar owner may not want to have that responsibility lingering over their head on a daily basis. In this scenario the pro’s outweigh the con’s and therefore it would be a great idea to form a corporation. Choosing the proper formation to conduct business is crucial for an organization. Whether one believes that personal liability, limited liability, or double taxation will increase their chances of surviving in the business world each organization has the ability to choose a specific formation. Formations of a business are unique, some benefit some organizations more than others and so forth. However, in most cases if circumstances

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