Sole Proprietorship, Partnership, or Corporation

When evaluating the benefits of each business, it is important to consider the size of each business. As an example, both sole proprietorships and partnerships are relatively small in size and may perhaps provide more personalized service to each of their clients. In many businesses, customers appreciate personalized service and may in turn hire small businesses for that service. On the other hand, a larger business, like McDonald’s, typically is composed of more resources and may offer the prospective customer a lower price.

Forming a business entity requires a great deal of knowledge before any decision is made. There are advantages and disadvantages to each entity and without proper understanding of what they are, individuals could make costly errors and forfeit crucial perks that would be in the businesses best interest. In the situation in New State, Alex, Bill, Carl, and Devon have inherited their father’s operating organic farm and seek advice, in regards to which form of business organization would best fit their particular criteria. They have emphasized their immediate concerns, wants and needs from a business standpoint, but also stress their strong faith to uphold and operate in accordance with the Christian worldview. Their criteria is as follows, (1) create an entity which averts formalities or complexities, (2) develop a structure allowing cousin Xavier to handle the day-to-day, (3) minimize taxes on the entity, (4) avoid any personal liability, (4) keep business in the family only, (5) remain in accordance with the Christian worldview, (which will be the final topic in this discussion). After reviewing all criteria, it will be advised that forming a limited liability company (LLC) and electing for an S corporation status would be of best interest for the family. Discussed below, is the strengths and weaknesses of each form of business organization as it applies to their unique situation, to help better understand why an LLC/S corporation, is the best form of

When choosing an idea for a new business, I would first consider my own interests above all

There is much to consider when expanding a business. How will you make, market, and distribute your product. Are you willing to take full liability for your product and understanding the legalities of what happens if your product is defective? Once that has been established, it’s important to make sure that your business dealings are in order. The strength of the contract and what all it entails. Knowing that the legal document is important more so when things tend to go downhill. Above all is deciding which type of business entity the company will select especially if the company starts out small and looks to

Another advertising & promotion technique they could use is Groupon, which was an appealing option because it involves zero start up cost and a wide customer reach.

Salta Company installs a manufacturing machine in its factory at the beginning of the year at a cost of $87,000. The machine’s useful life is estimated to be 5 years, or 400,000 units of product, with a $7,000 salvage value. During its second year, the machine produces 84,500 units of product. Determine the machines’ second year depreciation under the units of production method:

There are so many options available as to how they can structure the new business. The appropriate business entity for any individual(s) will depend on their particular facts and circumstances.

A partnership is the best form of business given Shania’s situation. She has support from all angles that want to help her Christian coffee shop be a success. A limited liability partnership is best suited for Shania because of her possible partnerships with her husband, sister, and neighbor. According to the Limited Partnership (2015) article, this form of business is a “voluntary association where one or more partners contribute capital only, and those partners play no role in management.” Her husband wanted to make a contribution to Shania’s business but not in the lane of management, so by using this partnership he can still contribute his capital and maintain his partnership. The liability is limited to the amount of capital that the partner contributes. As a “silent partner” Marvin can make investments with the company, but not have any voting power or control over day-to-day operations.

• Owner has limited capital: $15,000 for feasibility study; and $500,000 of trust money that will be made available for investment.

The other options have faults which I would explain to Shania. A sole proprietorships major downfall is the fact that the owner and company are the same legal entity, the “sole

There are five standard business entity types, and each will have pros and cons from a business and tax standpoint. You will need to select which entity you will be, and file the correct legal paperwork at the onset of your new venture. The five business entities are:

Jennifer and I had some similarities and differences in our discussion post. We both recommended sole proprietorship for Shania’s business. Sole proprietorship is an unincorporated business owned and ran by one individual with no distinction between the business and the owner (U.S. Small Business Administration, (n.d.). We both agree that since Shania’s husband, Marvin has no interest in contributing to the business, her being the sole business owner would be most appropriate for her business goals. One point Jennifer made about the business was that once it takes off, Shania needs to expand location, products, etc., she could also form a partnership when that opportunity arises. Jennifer makes a valid point because Shania does not always

Finally, Partner 3 is forward thinking and would like to ensure a transition of their stake in the business to their children. While this is possible, it may result in a dissolution and reestablishment of the partnership for the children to inherit a stake, combined to equal that of their parent. However, while forming the business, I would suggest adding to the partnership agreement a mechanism to transfer the interest of one partner to another, or multiple persons. This would have to be agreed upon during the formation to avoid a dissolution of the partnership in the future.

Coca Cola is a soft fizzy drink sold in every store throughout the world. It is produced by The Coca Cola Company of Atlanta in Georgia, and is often called as Coke.

There are a number of forms of ownership that the business can take. The main forms are sole proprietorship, partnership, Limited Liability Corporation, corporation and S corporation. There are advantages and disadvantages to each of these forms that will be discussed in this section. A sole proprietorship essentially has the person as the business. In this situation, the proprietor bears all of the risk involved in the business. Business income flows through to the proprietor's personal taxes. For some individuals there are tax advantages, but for many the appeal of the sole proprietorship is its simplicity. The IRS defines a partnership as a relationship existing between two or more individuals who joint to carry on a business. Partners divide income according to their own agreement and that income flows through to their personal taxes. Partners also have a high level of liability for any legal action that befalls the company.