Legal Forms of Business Paper
December 24, 2012
For entrepreneurs starting a new business many options are available for forming a new organization. New business owners must first look at the liability and must make a risk assessment for issues the new business will encounter. Entrepreneurs need to review their personal assets that have been invested in the company and how these assets are protected from legal issues that arise in the future and how these assets will be protected. Discussed will be scenarios proprietorship, partnership, limited liability partnership, Limited Liability Company, S corporation, franchise, and corporate form.
When starting a corporation the potential for legal issues can increase. Lawsuits can be very high, which means any customer, can file a lawsuit at any time for any reason. Entrepreneurs need to assemble a team’s knowledgeable in how to run a company and possess the knowledge of how the corporation needs to run to maintain profitability. New corporations the investor need to find investees, also building a trust helps keep the investors assets protected. To set up the above scenario a new entrepreneur will set up a corporation, this corporation is separate entities form the owners. The new corporation will give the shareholders and the owner’s protection from lawsuit and from possibility of losing assets. The corporation needs to be maintained and organized, the corporation must operate within the laws this will give the corporation the ability to protect assets of the employees and the corporation. The corporation can benefit from raising capital by selling stocks to investors also this can benefit the employees and the corporation by offering employees deductions in benefits such as health care plans. Corporations provide shareholders with more credibility than other types of organizations.
When starting a service such as a construction...