Solved by verified expert:Choosing a Form of OwnershipPlease 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…
