1. Advise a business manager how a sole proprietorship is created step-by-step. Provide an example to illustrate your points. Explain how the sole proprietorship differs from other forms of business entities. List no less than three advantages and three disadvantages of operating as a sole proprietorship.
2. Provide advice for business managers who want to form a partnership step-by-step and decide between a general partnership and a limited partnership. Identify the duties, rights, and liabilities of partners in a business. Distinguish between a Limited Liability Partnership (LLP), and a Limited Liability Limited Partnership (LLLP). List and explain the ways that a partnership can be dissolved.
3. Explain the law regarding Limited Liability Companies (LLC) for someone interested in starting a business. What are the limited liability aspects of a corporation? Outline the tax advantages of a partnership.
Sample Solution
Step-by-Step Guide to Creating a Sole Proprietorship
1. Choose a Business Name: Before you start your business, you need to come up with an appropriate name. You should also check with the local government for any trademark or copyright laws that may affect your chosen name. For example, if you want to create a sole proprietorship called “John’s Bakery” in Halifax County, then you would have to confirm that no other business has registered the same name in Halifax County.
2. Register Your Business: Most countries require sole proprietorships to register their business in order to obtain certain benefits such as tax deductions and limited liability protection. Additionally, it is important for sole proprietorships to keep precise financial records of their businesses operations so that they can accurately report their profits and losses at the end of each year.
3. Obtain Necessary Licenses and Permits: Depending on where you are located and what type of business activities your company will conduct, it may be necessary for you to acquire licenses or permits before beginning operations as a solo entrepreneur. In some jurisdictions this might include obtaining health department licenses or zoning permits from local authorities in order to legally operate within those areas of jurisdiction .
Sample Solution
Step-by-Step Guide to Creating a Sole Proprietorship
1. Choose a Business Name: Before you start your business, you need to come up with an appropriate name. You should also check with the local government for any trademark or copyright laws that may affect your chosen name. For example, if you want to create a sole proprietorship called “John’s Bakery” in Halifax County, then you would have to confirm that no other business has registered the same name in Halifax County.
2. Register Your Business: Most countries require sole proprietorships to register their business in order to obtain certain benefits such as tax deductions and limited liability protection. Additionally, it is important for sole proprietorships to keep precise financial records of their businesses operations so that they can accurately report their profits and losses at the end of each year.
3. Obtain Necessary Licenses and Permits: Depending on where you are located and what type of business activities your company will conduct, it may be necessary for you to acquire licenses or permits before beginning operations as a solo entrepreneur. In some jurisdictions this might include obtaining health department licenses or zoning permits from local authorities in order to legally operate within those areas of jurisdiction .