Legal, Social, and Economic Environments of Business

Legal, Social, and Economic Environments of Business

Introduction to Business / BUSN105

08/22/2012

Legal, Social, and Economic Environments of Business

Upon proceeding with a new business venture on must determine exactly which legal form of business will best suit the needs of the person, and the product. The proper business model must be selected beforehand to ensure the success of the product or idea. There are several aspects to consider when deciding the proper method.

A sole proprietorship is possibly the simplest form of business and easiest to start up. It is a one person business and is not incorporated or registered as a limited liability company. (NOLO, 2012) The owner of a sole proprietorship is solely responsible for all debts and liabilities incurred by the business but on the other hand he or she also has the ultimate decision making power and oversees any and all business transactions. (NYTIMES, 2012)

A partnership is exactly as the term implies, it is simply a joint venture between two or more people or entities who share in the business risk while also enjoying the protection of limited liability. Other investors may also be considered partners but might not participate in management activities. (Legal Zoom, 2012)

The third form of business is a corporation. A corporation is a legal entity that is separate from its owners and enjoys its own rights and responsibilities much the way a partnership or proprietorship does with the notable difference being that the owners are protected from possible risk. (Investopedia, 2012)

With the information provided within the business scenario it can best be determined that due to the lack of experience and skills we have available and also the amount of startup funds we will be best served by proposing our new invention to an already established firm who specializes in business ventures of this nature and one who is already established and can readily adapt the raw invention idea into a marketable product. By deciding that a sole proprietorship is not the way for us to establish the business we are left with the idea of taking on partners who have the proper financing and resources in place to actually bring the product to market.

While selling the idea outright should always remain an option, a partnership is the way to proceed in this venture.

References

NOLO. (2012). Sole Proprietorship Basics. Retrieved July 22, 2012 from http://www.nolo.com/legal-encyclopedia/sole-propri etorship-basics-29694.html.

New York Times. (2012). Advantages and Disadvantages of Sole Proprietorships. Retrieved July 22, 2012 from http://www.nytimes.com/allbusiness/AB4113314_prima