BUS402 General Partnership

Choosing a Form of Ownership
Please respond to the following:

  • From the e-Activity, describe the most appropriate form of ownership for your new franchise based on your current financial situation. Provide specific examples to support your response.
  • Assume the form of your new business will be a partnership (if you have not already done so). Discuss the types of conflicts that may arise and how you could prevent them from arising in the first place.

The Limited Liability Corporation is I think the best type of company structure based on my current financial situation. This type of ownership can have either one or multiple owners, allow owners to become equally involved in management of the company’s day-to-day operations, avoid double taxation that a general partnership or other corporations experience, escape restrictions imposed on owners of S corporations and provide limitations to the amount of liability imposed on owners for taxes plus legal and financial matters.

Of the four main business structures, having a partnership is one of the simplest and cheapest business types to set up and maintain. Partnerships are businesses with two or more owners that contribute money, property, labor or skills that share in the profits and losses of an organization (Partnerships, n.d.). Although partnerships are easy to form, one must carefully consider all the pros and cons of this type of business arraignment. As previously stated, one advantage to establishing a partnership is the ease and low start-up costs. This type of business venture does not have to be registered with the state or pay fees, as one would with a corporation or limited liability company (The Pros and Cons of Partnership, 2012). Partners are not restricted when establishing managerial responsibilities, decision making and voting rights, the structure of the organization and the distribution of profits and losses among owners.

References:

Partnerships. (n.d.). Retrieved from http://www.irs.gov/Businesses/Small-Businesses-&-S…

The pros and cons of partnerships. (2012, April 24). Retrieved from http://smallbusiness.yahoo.com/advisor/pros-cons-p…

 
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