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Description of Business Entities
There are a few primary options for business entities that Javier can consider for starting his hot sauce business. In a sole proprietorship for instance, the owner and business are one and the same, and there is no legal distinction between them. This therefore leaves the owner of the business open to limitless liability for any debts or legal actions that are taken against it. Similar in nature, is a general partnership which is usually held by two or more individuals, with shared, unrestricted liability for each member. When it comes to a corporation, the business is usually regarded as a separate legal entity from its owners. Limited liability applies to the owners, but corporations are a little more complicated, with extra rules and corporate taxes.
Limited liability companies (LLCs) on the other hand, offer their owners the pass- through taxation of a partnership along with limited liability similar to that of corporations. Moreover, customizable ownership and management arrangements are possible with an LLC (Bougie & Sekaran, 2019). Compared to corporations and limited liability companies (LLCs), sole proprietorships and partnerships usually subject their owners to much more personal liability. LLCs usually have much more greater structure and management flexibility, but corporations must be capable of complying with the more complex regulations that are in place. Generally speaking, partnerships and LLCs are essentially taxed differently than corporations, which are usually subject to double taxation (Nickels et al., 2019).
Product Liability Issues and Recommendations
Javier's hot sauce contains some extremely spicy peppers, and therefore strict responsibility may apply because of the inherent hazards that may be potentially associated with the ingredients. Customers may still experience a couple of side effects such as wet eyes or stomach pain even in cases where the product is manufactured properly. In order to lessen this,
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