Lit1 Task 310.1.2-01-06 Essay

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Part A (The report) Part B (The memorandum) Student Name Western Governors University Part A (The report) Determining what type of business venture to either start or invest in can be challenging. Over the next several pages we will evaluate the various types of business organizations and at the end of this report; you should have an initial or better understanding of the different types of business forms. Sole Proprietorship: The word proprietorship can sound intimidating. It is important to remember that most things are simplified with knowledge. If your business is a sole proprietorship then you as an individual are the owner and operator of that business. This means the sole proprietor handles everything from setting up …show more content…

• Control: A sole proprietor has total control of the company and they make all the good decisions and they must deal with decisions that did not turn out the way they intend. The other notable factor in being a sole proprietor of a business is what would happen to the business if the owner became ill or died; typically the business would stop operations based on the structure and debts would need to be resolved as well as customer commitments would need resolving based on the type of business. • Profit Retention: In addition to reaping the profits from the business, the sole individual is also responsible for all debts incurred and for paying expenditures of the business. • Location: In addition to federal laws that govern business a sole proprietorship is governed by the state laws in which it operates. If the proprietor opens another business location in a different state. The new state laws will govern the other business location therefore requiring the proprietor to understand and be compliant with more than one state laws based on the location of the business. (Beatty & Samuelson, 2007, pp. 755-756) General Partnership: Occurs when two or more individuals get together to operate a business with the intention of making profit. Each individual is a general partner of the business and all profits and losses are shared between the partners. General partnership agreements can be a written or verbal agreement. •

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