There are three legal forms of business: Sole Proprietorship, Partnership, and Corporation. The inventor scenario sounds like the business would start as a Sole Proprietorship since there are limited finances and the inventor’s net worth is low. However, with the new technology being introduced this business could quickly grow and eventually turn into a Partnership or possibly Corporation.
A Sole Proprietorship is the easiest business to start with little overhead cost. All decisions are made by the proprietor, so no worries with disagreements since the proprietor is the boss and getting started doe not cost a lot. The downfall to being a Sole Proprietor is you are an extension of your business so if things start to fall apart your personal assets can be ...view middle of the document...
Very different from the Sole Proprietorship where its one for all and the Partnership is all for one. The disadvantages of a Partnership include possibly not being able to mutually agree, and/or someone in the partnership having a tainted character making the business moral look low.
A Corporation is a business controlled by directors and shareholders. In a Corporation no one is personally responsible for the company’s debt but it can be difficult to get assets out or sell the business without double tax, and issues among shareholders. Out of the three legal forms of business the one I feel is most success is the Sole Proprietorship because most of my friends in Atlanta are self employed. They love what they do and dedicated countless hours in building their brand. Its so easy to wake up and decided you want to take control of your financially future and out of the three the easiest to start is the Sole Proprietorship and with hard work and skill it could grow into a Corporation like “Coco Chanel”.
Inclusion, “it is important that the business owner seriously considers the different forms of business organization—types such as sole proprietorship, partnership, and corporation. Which organizational form is most appropriate can be influenced by tax issues, legal issues, financial concerns, and personal concerns” (“StudyFinance: Types of Business Organization,”n.d). When starting a business as you gather detail for the business plan, it’s ideal to start thinking about which legal form of business best fits the needs of you business.
StudyFinance: Types of Business Organization. (n.d.). StudyFinance: Fundamentals of Applied Finance. Retrieved January 13, 2013, from http://www.studyfinance.com/lessons/buso