Forms of Business

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Forms of Business
There are multiple business formation options available to those looking to start a business. The type of formation depends various factors “including the ease and cost of formation, the capital requirements of the business, the flexibility of management decisions, government restrictions, personal liability, and tax consideration” (Chessman, 201) to name a few. The major forms of business organizations are general partnership, limited partnership, sole proprietorship, limited liability partnerships, limited liability company, and corporation. Having an understanding of the type of business to form depends on what the goal of the company is.
Sole Proprietorship
A sole proprietorship is the simplest form of business organization. The owner of the business is the business and there is no separate legal entity. Management decisions concerning the business are made by the owner without having to consort with anyone else. All the profits from the business belong to the owner. One would set up a sole proprietorship if they running a small business, such as a restaurant named after themself. The business would belong to them and is identified by their name as is the form of business. The preference for this setup would be to have complete control of the menu, restaurant décor, staff, and operation of the establishment according to only the owner of the establishment.
A partnership “is a voluntary association of two or more persons for carrying on a business as co-owners for profit” (Chessman, 2010). A partnership can operate under the name of any one partner, all partners, or a fictitious business name. In a partnership all individuals are personally liable for the debts and obligations of the company. A partnership would be idea for three individuals going into a catering business. They each own the company equally and bring a different…...

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