University of Phoenix Material
Business Forms Worksheet
There are seven forms of business: sole proprietorship, partnership, limited liability partnership, limited liability company (including the single member LLC), S Corporation, Franchise, and Corporation.
1. Research and provide three advantages and three disadvantages for each business form.
2. Provide a 100- to 200-word summary in which you provide an example business that you would start for each form. What is legally necessary to file in order to form that business? Discuss at least one of the advantages and one of the disadvantages of that form.
Sole Proprietorship
Advantages
1. Easier Tax Filing
2. Lower Start up cost
3. Fewer Gov Rules
Disadvantages
1. Unlimited Liability- Responsible for all debt
2. Being completely in charge of finances could lead to complacency of record keeping
3. Difficult to get outside investors for expansion
Summary
In order to start a sole proprietorship, the only real requirement is to provide a good or service and notbe employed by any other company during the execution of the good or service. An example of a soleproprietorship that I would start would be a consulting firm because it requires next to no money to getstarted, and it does not need an actual storefront to operate out of. The biggest difficulty in starting thisbusiness would be future expansion. It would be very difficult to secure funding to hire moreconsultants, which means income will be limited by how many hours I can work.
Partnership
Advantages
1. Easy formation
2. Access to diverse skill sets
3. Risk is shared by all partners
Disadvantages
1. Unlimited liability
2. Responsible for the actions of all partners
3. Entering or leaving the partnership requires approval of all current partners
Summary
In order to form a partnership, the only stipulation is the voluntary association of two or more individualsas co-owners in...