FORM OF BUSINESS

Deciding the Legal Form of Business



Abstract

The case report is targeted to choose the best available legal form of business for the venture. First of all, situation has been analyzed in order to sort out the factors, which influence the final choice of the legal form. It is followed by the comparison of the legal forms of business. For this purpose, sole proprietorship, partnership and corporation have been taken into account. Finally, discussion explaining the final selection of a particular legal form of business is provided. The Scenario

I am a family oriented person and in the given scenario I am an inventor who enjoys working around the home, cleaning, cooking, and doing minor home repairs and remodeling. I have also little financial skills and have no idea about management. As it is believed that the requirement for successful businessmen is always to have great idea, and that's what I have, a great idea for a new kind of home appliance that meets every day consumer needs. I face issues in funding the start-up, but I have an idea of safer appliance than already present in the market. I know nothing about manufacturing other than that it costs lots of money to set up a plant. I am also convinced that this new technology idea would be applicable in a wide range of other products. So there is a scope of my business idea with widespread application.

Comparison of Legal Forms of Business

One of the most important decisions entrepreneurs make is how to legally establish your business. Choice may be a wise move or a costly mistake in respect of taxes, protection from liability and the amount of the resulting flexibility in managing the operation. Form of organization chosen depends on the following factors:

• Legal restrictions

• Capital requirements

• Commitment

• Number ...