Legal Forms of Business

Legal Forms of Business
Audrey Tarver
LAW 531
May 28, 2012
Bradley Romig

Legal Forms of Business
Understanding business and the diverse legal forms of business can be complicated.   Learning the various forms of business and deciding which forms appropriately applies to the type of business sought is essential to making the most favorable choice.   In most cases, business owners must examine state and federal laws, tax laws, and other legal aspects.   The legal forms of business; sole proprietorship, partnership, limited liability company, limited liability partnership, S corporation, franchise, and corporate will be examined.  
Sole Proprietorship
Sole proprietorship is straightforward; the owner is the business (Cheeseman, 2010).   According to Cheeseman, the business is not an independent legal entity.   Sole proprietorship is the preferred form of business for an individual providing services such as catering, landscaping, housecleaning, and document preparation services.   The sole proprietorship is the preferred form of business because the owner owns the entire business, receives all of the profits, and if the owner sees fit to do so, ownership can be easily transferred   (Cheeseman, 2010).   The advantages of sole proprietorship include minimal formal business requirements, no corporate tax payments, and complete control of decisions, sales, and transfer (Cheeseman, 2010).
A partnership is a for profit organization consisting of two or more people; co-owners, carrying on a business, as co-owners, for profit (Cheeseman, 2010).   Partnerships can be cost-effective and easy to establish.   In most cases, partnerships develop when at least one person has a certain set of skills, or equipment, and another one or more have a sense of business, and maybe start up capitol.   Combined, these assets can form into a successful business such as livery services or real estate.  
Limited Liability Partnership
A limited partnership consists of general...