Bus 415 Week 5 Paper

Bus 415 Week 5 Paper - Business Entities, Laws, and...

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Business Entities, Laws, and Regulations Paper Holly M. Hyatt BUS415 Business Law Tiffany Brady October 10, 2011
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Business Entities, Laws, and Regulations Paper Everyday American entrepreneurs choose to start new businesses many people around the globe do this too. When you create a new business you also create jobs for others, you create products and services. Which in turn creates economic growth theses people are referred to as an entrepreneur is “a person who forms and operates a business” (Cheeseman, 2010, p. 250). Many entrepreneurs start businesses by themselves or have business partners. In the early stages businesses start off small but can have significant growth during this time. Michael Dell did just this when he registered the Dell Computer Corporation with a $1,000 startup and his idea to sell directly to the consumer by getting rid of the middleman. Four years after that Dell had raised $30 million in IPO, "increasing the market capitalization for the company from $1,000 to $85 million" (Dell, 2008, para. 1). If one wants to start up a business they have to decide what kind of business organization that should be: sole proprietorship, general partnership, limited liability partnership, etc. Several factors have to be taken into consideration like capital requirements, government restrictions, and tax consideration when choosing a type of business. This paper will evaluate a few scenarios and determine the best business type for each scenario, while identifying laws, regulations and the risk that should be considered when starting a business. Restaurant/Bar Scenario John and Thomas would like to open a restaurant/bar, where consumers can socialize and view sporting events in the bar area. John and Thomas do not have enough start-up capital but do have a wealthy investor, Clarissa, wants to provide the capital in exchange for a percentage of the ownership. Most entrepreneurs that start a business choose the limited liability company
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(LLC) as the legal type for running their businesses. John and Thomas should choose a Limited Liability for their company. The LLC is "an unincorporated business entity that combines the most favorable attributes of general partnership, limited partnership and corporation" (Cheeseman, 2010, p.267). A limited liability company is a separate legal entity. It is a simulated person specific from its members who sign and enforce contracts, can sue or be sued, or be criminally liable when violating business laws and regulations. LLC codes control the LLC's construction, administration, and division. Entrepreneurs form LLCs pursuant to the state laws in which they are created. The LLC is taxed as a partnership except if John and Thomas decide to be get taxed as a corporation. The owners of the LLC are considered to be members as well. State by state varies on
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Bus 415 Week 5 Paper - Business Entities, Laws, and...

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