BusLaw11.035 - ISSUES IN SELECTING A BUSINESS FORM...

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ISSUES IN SELECTING A BUSINESS FORM Entrepreneur: Someone who initiates and assumes the financial risk of a new enterprise. One or more entrepreneurs setting out to start a business should consider the following four factors when deciding what form of business to organize: (1) ease and expense of creation , (2) liability of the owner(s) for obligations of the entity, (3) tax considerations, and (4) the need and ability to raise capital . Ch. 35: Sole Proprietorships and Franchises - No. 1 Clarkson et al.’s Business Law (11th ed.)
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TRADITIONAL BUSINESS FORMS Sole Proprietorship: A business owned by a single person or family. Partnership: An agreement by two or more persons to carry on, as co-owners, a business for profit. Corporation: A legal entity formed in compliance with the statutory requirements of its state of incorporation, owned by shareholders whose liability is limited to their investment in the corporation, and managed by (i) a board of directors elected by the shareholders and (ii) officers employed by the board of directors. Ch. 35: Sole Proprietorships and Franchises - No. 2 Clarkson et al.’s Business Law (11th ed.)
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SOLE PROPRIETORSHIP: PROS AND CONS Advantages: a proprietorship is easy and inexpensive to form; the proprietor receives all of the profits ; the owner has the maximum degree of control over business decisions; and the proprietor may establish a tax-exempt retirement account . Disadvantages:
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This note was uploaded on 05/05/2010 for the course BUSINESS 71356 taught by Professor Higgin during the Spring '09 term at Miss. College.

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BusLaw11.035 - ISSUES IN SELECTING A BUSINESS FORM...

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