Question

Analyze what a business owner must consider when deciding what type of entity is best for the goals and vision of the business. Provide at least two (2) examples of research the owner must perform to ensure the proper election is made. Provide support for your rationale.

Answer 1

There are several factors which a business owner considers while deciding the type of entity :

1. Compliances and regulations: Corporations have much wider rules to follow than sole proprietorship or partnership. So, its depends upon the owners choice.

2. Profit sharing : if owner doesnot want to share profit among others sole proprietorship is good.

3. Liability for debts: whereas sole proprietorship or partnership leads to the use of personal money for payments of business debts, Corporation owners avoids such liability