The Best Business Organizational Structure For Kng Music Production
1818 Words8 Pages
The purpose of this paper is to create a personal liability exposure matrix then compare and contrast the personal liability exposure of an owner of each type of business (sole proprietorship, general partnership, limited partnership, corporation, and limited liability corporation). This paper will also analyze how to limit the personal liability exposure of the owner of five separate business structures. The following five types of business organizational structures are covered; sole proprietorship, general partnership, Limited Partnership (LP), corporation, and Limited Liability Corporation (LLC). In addition, this paper will examine the best business organizational structure for KNG Music Production, a music production company…show more content… Tinker & Tailor’s Home Security Service, LLC (LLC) Liability: Members of an LLC enjoy limited liability for the debts and obligations of the business, including liability for the unlawful acts of other members and employees.
Sole Proprietorship. In comparison and contrast, the liability exposure associated with the various forms of business organizational structure is important to each business owner; before beginning their business venture. The sole proprietor does not have to ask for anyone’s permission, wait for votes or meetings, or seek others’ approval (Seaquist, 2012). For example, a sole proprietorship offers autonomy and freedom from vicarious liability of co-owners. In a sole proprietorship of the Tinker and Taylor’s Home Security Service, it is difficult to limit one’s liability. In a sole proprietorship the owner of the business is liable for all damages incurred and said owners personal assets are not protected from lawsuit.
The sole proprietor and the business are one in the same with regard to liability. The sole proprietorship is not recognized as a separate entity from its owner; as a consequence, the debts of the business are deemed to be the personal debts of the owner, and the sole proprietor has unlimited personal liability for all the debts, contractual obligations, and legal judgments the business incurs (Seaquist, 2012).However, just as important as the autonomy, the sole proprietorship permits the business owner freedom