The Law of Enterprise Organization Assignment Example | Topics and Well Written Essays - 2000 words

The Law of Enterprise scheme - Assignment ExampleThis is then followed by a discussion of the pros and cons for each investor and for the craft as a whole with a focus on Limited Liability Comp some(prenominal), Limited Liability Partnership, and S and C corporations. Discussion Sole proprietorship In Massachusetts there are no statutory requirements authorities the creation of a sole proprietorship. Hence, a sole proprietor interest in the business is delineate by the assets of the business, and he or she is non considered as a separate legal entity, in particular(a) for federal income tax. Therefore, every income, loss, credit and profits are taxed under the proprietor marginal tax level. The new(prenominal) major reason why sole proprietorships cannot benefit this group is that they will each be entirely liable for the responsibility of the business to the degree of his or her individual and business assets. Every personal assets connected to the enterprise can be seized to make payments. Even though homeowner insurance can dish out in excluding liabilities arising in the course of the business transaction, they will still need further riders and policies (Griffin 2). Given that the owner of any sole proprietorship is in complete and absolute command of the business such a structure would not work in a group like this due to dissimilar vested interests, judgements, and contributions. world(a) Partnerships General Partnerships would not work very head for this group since the henchmans would be liable for the debts as well as obligations arising from any wrongful acts by another partner. Specifically when that partner performs during the commonplace itinerary of the business or otherwise acted with the say-so of other partners. This group comprises ambitious people who have their own idea on how to run the business with each seeking to be more active in the management. Hence, any business debt or liabilities due to one of them implies that they w ill be liable for the risk also as they are legally tied. Therefore, it is going to be difficult to create lasting trust (Miller and Jentz 530). Limited Partnerships base on the stipulations of Chapter 109, section 2 of the coherent Limited Partnership Act, a limited partnership would not work very well for this group since it would imply some members possessing minimal level of control and or else limited liability and the one who is active will be liable for any debt or obligation. For instance, to Charlie such a structure would imply him having minimal control of the business since he would not be active, compensate though he has contributed significant amount of capital and clientele and publicity. Furthermore, the fact that one general partner responsible for running the partnership implies that he or she will be responsible for debts plus liabilities beyond the sum of their contributions, and this would definitely make it hard for any of them to accept to be a general part ner, as it will be a great risk on their part. For Leila this would entail placing her parents retirement and property at risk and Andrew and Indira would lose a lot in terms of their contribution, in particular Indira who is willing to owe her house as part of her capital contribution (ONeill and Warda 14). Limited Liability Partnerships Based on the Uniform Partnership Act Chapter 108A, Section 48 one of the key benefits of Limited liability partnerships is that, there is a