Legal Underpinnings Of Business Law

There are three types of business entities: sole proprietorship, partnerships, and corporations. Sole proprietorships are businesses owned by an individual person. They are easy to form, but are not taxed. Instead the individual business owner is taxed on any monies acquired on behalf of the business (Kubasek, 2012. Partnerships are businesses that are owned by more than one individual owners. The big thing about partnerships is that each partner is personally responsible for the acts of the other partners in the business . (Kubasek, 2012 Corporations are businesses owned by multiple people to include shareholders (Kubasek, 2012). They can sue and be sued and are subject to a host of rules and regulations set forth by the government.

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.

* The liability does not fall on one individual instead it is assumed by the business in a corporation. Individuals representing the company can still be personally sued in some states.

When brainstorming to start a business, it is essential to research the most efficient way to start a company and all the liabilities that can happen. Business can become successful with the right person in place and a unique idea. When making a company, it is crucial to determine the structure, which organization to start with and the liability that is involved. When taking a closer look at five different company structures Sole Proprietorship, General Partnership, Limited Partnership, S/C Corporation, and Limited Liability. Which have not honored the contract and are at risk for legal actions. The various liabilities between each owner will be discussed. Which will analyze ways to limit liability and display my future business

Charlie is going to rescind the contract. He demands return of his money and compensation for the loss of commission on several high profile sales of his business. He wants to rescind the contract because the package of software recommend by Carmine was obsolete, despite Carmine’s assurances.

Each business entity is structured differently and, as a result, has unique tax implications. The types of business entities covered in this course were: sole proprietorships, partnerships, C Corporations, S Corporations, and Limited Liability Companies (LLC). The entities were differentiated by the number of owners and/or shareholder, whether they are a pass-through entity or not, and the level of liability the shareholder(s)/ owners(s) are responsible for. A sole proprietorship, which is a business with one owner who assumes unlimited liability, as well as general and limited liability partnerships, which have at least two owners (with potentially some of the owners assuming liability only to the extent of their

The limited liability partnership (LLP) is another type of partnership. LLP is “a partnership consisting of one or more general partners and one or more limited partners” (p. 554). “It was created to limit the personal liability of the partners of "losing their personal assets to only their own acts and omissions and to the acts and omissions of people under their supervision” (Nickels, McHugh, & McHugh, 2013, p. 119). This business form also “allows a partnership to continue as a pass-through entity for tax purposes” (Miller, 2014, p. 554). However, limited liability partnership is not recognized as a legal business structure in every state, unlike the general partnership, In addition, taxing authorities in some states recognize the structure of LLP as a nonpartnership for tax purposes due to its special structure (Scott & Media, n.d.). There is also a limited partnership, which has one or more general partners and one or more limited partners. One partner will be a general partner and has unlimited liability and is active in managing the firm whereas the limited partner will only invest money in the business but does not have any management responsibility or liability for losses beyond the investment.

Limited Partnership- A limited partnership consists of at least one general partner (controls the business) and at least one limited partner(investor).

Partnership- the partnership established as a legal business entity a group of two or more persons goes in into a legal contract by which the partners agree to operate a business and share the profits from that business. There are limitations on the life span of a partnership; it ends with

There are different aspects of each type of business structure, sole proprietorship, partnership, LLC, and corporation. A sole proprietorship is “a business owned and operated by a single person. The business has no legal existence from its owner” (Rogers, 2012). This also means that the sole proprietorship is liable for everything, debts, lawsuits, taxes, etc. In a partnership, “an association of two or more competent persons to carry on a business as co-owners for profit. The business itself is not a legal entity” (Rogers, 2012). In a partnership any members of the partnership, which has to be more than two persons, can be held liable for the same as a sole proprietorship, the debts, taxes, etc. There are also limited partnerships which will be created when filing with the state, with one general and at least one limited partner. This makes it so the limited partner will not be personally liable for the debts of the business. An LLC, Limited Liability Company, can be formed via an application to the state and will try to combine the advantages of partnerships and corporations. Therefore, an LLC will protect an individual more than a partnership would. Lastly, a corporation is “a business entity that is formed through application to the state, which allows shareholders limited liability. Corporations have the legal status of persons and a corporation will also protect the individual, much like an LLC would.

The heart of a Limited Liability Company is known as the "Operating Agreement". This document sets the rules for operating the company and can be modified as the business grows and changes. Operating an LLC is less formal than a corporation, usually only requiring an Annual Members’ Meeting and Members’ agreeing to changes of the Operating Agreement and other major company decisions. Provides the liability protection of a corporation without the corporate formalities (Board meetings, Shareholder meetings, minutes, etc.) and extra levels of management (Shareholders, Directors, Officers). Taxed the same as a sole proprietorship (1 Member LLC) or partnership (2 or more Members).

On the other hand, a properly chartered and maintained corporation will in most cases protect owners and shareholders against any such actions or liabilities lodged against a business. A more detailed discussion of these various options follows.

Business organization is a group of people who are organized for some charitable or profitable purpose. Business entity is a corporate, commercial or other institution which is formed or administered according to the commercial law so as to engage in business activities which is generally selling of any product or service. In accounting business organization and owners both are separate or distinct from each other. This means that the personal transactions of owner are separately treated from business. In legal system there are various forms of business organizations and they are corporations, cooperatives, sole traders or sole proprietorship, partnership and Limited Liability Company. All vary from each other on the basis of level of control but follows the same principle of separation.

Government administration of any country is extensive and plays crucial role of ensuring welfare to the people. Any countries government services exercise the authority and produce their services through diversity of schemes. In the interest of creating confirmation of having exercised the best care to protect the data on the manufacturing firm’s networks, the legal counsel started urging the firms to actively invest in the quality procedures and technology that will collect bulk of judicially sound data defensible by the law. The intense situation that led to remodel the traditional or old models for the rate of response is to include this

Liability – In an ordinary partnership members are responsible for all debts accrued by the business and do not observe any protection should the business fail and as such limited companies hold an advantage in that the Company shareholders will only be liable for debt up to the value of their individual investment, this offers a degree of