Business Formation Article Review

ARTICLE REVIEW

UNIVERSITY OF PHOENIX

DATE: November 19, 2007

TO: Garth Ferrell

FROM: ***** *****

RE: Business Formation

Aggarwal, Mansi. (2006, February 06). Business Formation. EzineArticles. Retrieved November 19, 2007, from http://ezinearticles.com/?Business-Formation&id=140409

ARTICLE SYNOPSIS

The article reviewed in this paper describes the various benefits and disadvantages of sole proprietorships, forms of partnerships and forms of corporations. A sole proprietorship is an entity where one person owns the business, having all profits for his or herself but has sole responsibility for losses and legal and tax issues. A partnership is the structure involving two or more people owning the business, sharing the responsibilities and profits, but having a greater chance of failure due to disputes among the owners. A corporation is when the entity is owned by a group of owners or stockholders who are unaffected by profits or losses and enjoy tax advantages, but lose autonomy and don't have much say in decisions. Once the structure of the business entity is decided upon, there are still many decisions to make before 'opening the doors' to consumers. These decisions include operations, goals and aims, business targets, the means available to achieve those targets, location and finances.

LEGAL ISSUE

A massive amount of planning and management are needed to start a successful business. The business entity structure is the first decision to be made before opening the doors. There are benefits and disadvantages to all forms, and this must be researched thoroughly before taking the next