The Legal Forms Of Business - 2782 Words

Final Paper: Legal Forms of Business Samantha Simpfenderfer Cazenovia College When developing and establishing a business, a business owner must first consider what type of legal business that they would like to create and own. In the United States, businesses that vary in form are recognized and represented in court in varying ways. In some forms of business, the personal assets of the business owner are not protected, where in others, a business owner could never risk losing assets outside of their businesses. Of the various forms of businesses that can exist, five of the most popular forms are sole proprietorships, franchises, partnerships, limited liability companies, and corporations. Different businesses all around the†¦show more content†¦When one person owns, operates, and manages a business, they get to make all of the leadership decisions as they see fit, and for some, being their own boss, without having anyone to answer to is the only way that they can be successful. In addition to a variety of advantages, there are al so an assortment of downfalls associated with owning a sole proprietorship. First and foremost, the legal structure of â€Å"a sole proprietorship provides no protection for the founder against creditors of the business† (Harroch). This means that the business owner can easily be sued with absolutely no legal protection. One legal issue can potentially put a sole proprietorship out of businesses as the legal process is expensive and long lasting, and combining these two issues, very few sole proprietorships have the ability to withstand them. Others shy away from sole proprietorships because often times the startup costs of opening a business (like buying property and equipment) are too hefty for one person to invest all by themselves. Businesses could potentially be expensive to start, and if â€Å"capital is required from other investors† it will not be available from sole proprietors (Harroch). It is important to recognize that many large, nationwide, and valuab le businesses have found their roots