some investment from other people? Will you need bank loans? If so,will you have difficulty getting them yourself?8.How much liability exposure are you willing to accept? Are you willingto risk your personal assets—your bank account, your car, maybe evenyour home—for your business? Are you prepared to pay business debtsout of your personal funds? Do you feel uneasy about acceptingpersonal liability for the actions of fellow owners?Chapter 4 Selecting a Form of Business Ownership KEY TAKEAWAYS • Some of the questions that you’d probably ask yourself in choosing the appropriate legal form for your business include the following: 1. What are you willing to do to set up and operate your business ? 2. How much control do you want ? 3. Do you want to share profits with others ? 4. Do you want to avoid special taxes on your business ? 5. Do you have all the skills needed to run the business ? 6. Should it be possible for the business to continue without you ? 7. What are your financing needs ? 8. How much liability exposure are you willing to accept ? • No single form of ownership—sole proprietorship, partnership, or corporation—will give you everything you want. Each has advantages and disadvantages. 4.1 Factors to Consider 177
EXERCISE (AACSB) Analysis Review the eight questions identified in this section that you’d probably ask yourself in choosing the appropriate legal form. Rate each of the questions using this scale:  not at all important;  not very important;  somewhat important;  very important;  extremely important. Select the two questions that are most important to you and the two questions that are least important to you, and explain your responses to these four questions. Chapter 4 Selecting a Form of Business Ownership 4.1 Factors to Consider 178
Figure 4.1 4.2 Sole Proprietorship LEARNING OBJECTIVE
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