Business Structure Report

If you were asked to recommend a legal business structure for someone’s business, do you feel equipped with the knowledge to provide sound advice? The person asking you would want to know the benefits and drawbacks of each structure and be able to determine which one fits the need. They also would want to understand any legal considerations involved and the steps it would take to create the structure.

To prepare for this Assignment:

• Review the Learning Resources and take into consideration how different business owners will have a variety of wants and needs when deciding upon a legal business structure. Try to anticipate those needs.
• Refer to the Academic Writing Expectations for 2000/3000-Level Courses as you compose your Assignment.

By Day 7

Submit your report containing recommendations for appropriate legal structures for the five clients’ business types. For each scenario, address the following in your report:

• Choose which type of business structure would be most appropriate for the situation.
• List pros and cons of the recommended structure.
• List the steps required for creating this type of business structure.
• Include legal considerations and examples of related legal issues, including personal liability and taxes, as well as profit distribution, if applicable.

Scenario 1

Karen and Alex have worked together to create a concept to form a website development company. To do this, they have asked three associates to invest their own money in the business in return for receiving a percentage of the profits. The three investors will not need to be involved in any of the day-to-day management or conducting of business in the proposed company. (225–300 words, 3–4 paragraphs)

Scenario 2

A few years ago, Anika started a skateboard company called Wheels Up and she has run it as a sole proprietorship. Wheels Up has operated successfully, creating a sizable workforce and management team; however, a market opportunity has surfaced that could create significant and sustainable growth. Anika wants to change the structure of her business. She is in negotiations with venture capitalists who are interested in investing in the company. She also has two employees, Sandra and Geoff, who are so integral to the company that she wishes they had more of a stake in it. (225–300 words, 3–4 paragraphs)

Scenario 3

George would like to start a landscaping business and call it Landscaping by George. The business would require the use of heavy equipment, a large truck with a hydraulic lift, and an open trailer. Because of that, he is fearful of causing an accident and getting sued. He is mainly concerned about reducing the risk of losing his house and other personal assets because of something that happens with the business. (225–300 words, 3–4 paragraphs)

Scenario 4

Jose has started a website where he sells products that he designs and produces himself, such as T-shirts, coffee mugs, bumper stickers, and other similar items. He wants to create a business based off this website and is hoping to do so in the least complicated way possible. (225–300 words, 3–4 paragraphs)

Scenario 5

Deborah owns a bakery that is best known for her specialty cupcakes. Her most important ingredients are the gourmet chocolates Theo produces in his candy shop. They would like to form a business structure together that helps them to market both of their brands and make consumers aware of the importance of the relationship of their products. (225–300 words, 3–4 paragraphs)

Note: Be sure to reference at least one scholarly source for each scenario in your report to support your work. Use the Week 6 Assignment Template, provided in this week’s Learning Resources, to complete this Assignment.

Required Resources

Legal Business Structures

The choice of legal structure for a business largely depends on how the business will be run and who will be involved in running it. These resources provide you with different viewpoints and perspectives on basics of business structures, how one might choose a business structure, and governmental oversite of business structures.

Internal Revenue Service. (2018a). Business structures. Retrieved from https://www.irs.gov/businesses/small-businesses-self-employed/business-structures

 

Time Estimate: 11 minutes

Lumen Learning. (n.d.-g). Legal forms of business ownership: Factors to consider. In Work within the law. Portland, OR: Author. Retrieved January 30, 2019, from https://courses.lumenlearning.com/workwithinthelaw/chapter/legal-forms-of-business-ownership-factors-to-consider/

 

Time Estimate: 3 minutes

Lumen Learning. (n.d.-l). Reading: Business organizations. In Business law. Portland, OR: Author. Retrieved January 30, 2019, from https://courses.lumenlearning.com/masterybusinesslaw/chapter/business-organization/

 

Time Estimate: 6 minutes

Nolo. (n.d.-a). Learn about business ownership structures. Retrieved January 30, 2019, from https://www.nolo.com/legal-encyclopedia/learn-about-business-ownership-structures-29785.html

 

Time Estimate: 6 minutes

U.S. Small Business Administration. (n.d.-a). Choose a business structure. Retrieved January 30, 2019, from https://www.sba.gov/business-guide/launch-your-business/choose-business-structure

 

Time Estimate: 9 minutes

Sole Proprietorships

A sole proprietorship is a basic type of legal structure used by individuals who operate small businesses on their own. The following resources are intended to offer different viewpoints and perspectives into forming a sole proprietorship. They also cover the rules and regulations that govern this type of business structure.

Entrepreneur Media. (n.d.). Sole proprietorship. Retrieved January 30, 2019, from https://www.entrepreneur.com/encyclopedia/sole-proprietorship

 

Time Estimate: 5 minutes

U.S. Small Business Administration. (n.d.-b). Sole proprietorship. Retrieved January 30, 2019, from https://www.sba.gov/content/sole-proprietorship

 

Time Estimate: 3 minutes

Partnerships and Limited Liability Partnerships

These resources introduce you to partnerships and limited liability partnerships as forms of business structures. This topic is presented within several resources to provide you with different viewpoints and perspectives on the subject.

Internal Revenue Service. (2018d). Partnerships. Retrieved from https://www.irs.gov/businesses/small-businesses-self-employed/partnerships

 

Time Estimate: 2 minutes

Nolo. (n.d.-b). Limited partnerships and limited liability partnerships. Retrieved January 30, 2019, from https://www.nolo.com/legal-encyclopedia/limited-partnerships-limited-liability-partnerships-29748.html

 

Time Estimate: 6 minutes

Limited Liability Corporations

Limited liability corporations are a common form of business structure. These resources define limited liability corporations from different viewpoints and perspectives and explain why one might choose this type of business structure.

Colgate, A. (n.d.). What is a limited liability company (LLC)? Retrieved January 30, 2019, from http://www.businessdictionary.com/article/39/what-is-a-limited-liability-company-llc/

 

Time Estimate: 3 minutes

Internal Revenue Service. (2018c). Limited liability company (LLC). Retrieved from https://www.irs.gov/businesses/small-businesses-self-employed/limited-liability-company-llc

 

Time Estimate: 2 minutes

Corporations

Corporations are common and are the type of business structure for most large businesses. The following resources define a corporation from different viewpoints and perspectives and describe which rules and regulations apply to this type of business structure.

Internal Revenue Service. (2018b). Forming a corporation. Retrieved from https://www.irs.gov/businesses/small-businesses-self-employed/forming-a-corporation

 

Time Estimate: 2 minutes

Lumen Learning. (n.d.-c). Corporate organization. In Business and the legal environment. Portland, OR: Author. Retrieved January 30, 2019, from https://courses.lumenlearning.com/buslegalenv/chapter/21-5-corporate-organization/

 

Time Estimate: 11 minutes

Lumen Learning. (n.d.-j). Powers of a corporation. In Business and the legal environment. Portland, OR: Author. Retrieved January 30, 2019, from https://courses.lumenlearning.com/buslegalenv/chapter/23-1-powers-of-a-corporation/

 

Time Estimate: 7 minutes

Lumen Learning. (n.d.-n). Reading: Corporations. In Business law. Portland, OR: Author. Retrieved January 30, 2019, from https://courses.lumenlearning.com/masterybusinesslaw/chapter/corporations/

 

Time Estimate: 16 minutes

Lumen Learning. (n.d.-x). The corporate veil: The corporation as a legal entity. In Business and the legal environment. Portland, OR: Author. Retrieved January 30, 2019, from https://courses.lumenlearning.com/buslegalenv/chapter/21-3-the-corporate-veil-the-corporation-as-a-legal-entity/

 

Time Estimate: 7 minutes

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