Submitted By Amy-Kolb
Words: 1552
Pages: 7

Business Forms Worksheet There are seven forms of business sole proprietorship, partnership, limited liability partnership, limited liability company (including the single member LLC), S Corporation, Franchise, and Corporation. Research and provide three advantages and three disadvantages for each business form. Provide a 100- to 200-word summary in which you provide an example business that you would start for each form. What is legally necessary to file in order to form that business Discuss at least one of the advantages and one of the disadvantages of that form. Sole Proprietorship Advantages Lower start up cost Fewer government rules Easy tax filing Disadvantages Responsible for all debts Difficult to get outside investors for expansion Being completely in charge of finances could lead to complacency of record keeping Summary In order to start a sole proprietorship, the only real requirement is to provide a good or service and not be employed by any other company during the execution of the good or service. An example of a sole proprietorship that I would start would be a consulting firm because it requires very little money to get started, and it does not need an actual store front to operate out of. The biggest difficulty in starting this business would be future expansion. It would be very difficult to secure funding to hire more consultants, which means income will be limited by how many hours I can work. Partnership Advantages Risk is shared by all partners Access to diverse skill sets Easy formation Disadvantages Unlimited liability Responsible for the actions of all partners Entering or leaving the partnership requires approval of all current partners Summary In order to form a partnership, the only stipulation is the voluntary association of two or more individualsas co-owners in a for profit business. The most prevalent form of a partnership is that of a law firm, andthis is the type of partnership I would like to form as well. The reason for this is because, as lawyers, it would be fairly easy to navigate the paperwork for the partnership, and it would be easy to expand the scope of the business later. The one downside is that it would be very difficult to leave the firm and start a new one. Limited Liability Partnership Advantages Flexibility in contributions to the business Not responsible for acts of partners or employees outside of your direct control Not responsible for company debts, except for personal guarantees Disadvantages They are not recognized in every state These cannot be a single person entity Partners are not obligated to consult with other partners for decisions Summary In order to be recognized as a Limited Liability Partnership, the business must file articles of limitedliability partnership with the Secretary of State for the business home state. In addition, limited liability partnerships are usually limited to professional groups, such as lawyers and doctors. I would start a limited liability partnership as a doctors office comprised of different specialists so they can all contribute in their area of expertise. The one downside for these businesses that if one partner has an issue, it could potentially ruin the reputation of all the other partners in the office.Limited Liability Company, (including the single member LLC) Advantages Can be a single person with all the benefits of a sole proprietorship Limited personal liability Easier to set-up and maintain that other corporate entities Disadvantages Some states tax LLCs but not partnerships Members are required to pay self-employment taxes There is a lack of uniformity amounts states for LLC statutes Summary To start a limited liability company, the business only has to deliver articles of organization to the Secretary of State for the business home state. Because of the protection of limited liability, the best type of store to open as a limited liability company is a retail store. If the business is not profitable or ifsomeone