Business Entities, Laws, and Regulations

Running head: Business Entities, Laws, and Regulations

Business Entities, Laws, and Regulations

Businesses can originate or expand into several types of entities. General or limited Partnership, Corporation, Limited Liability Company (LLC), Limited Liability Partnership (LLP) and nonprofit organizations are some of the styles business owners and shareholders can choose from to operate their businesses. A new business owner or owners will need to assess the type of business that will be most valuable for the business. Each style has its own advantages and disadvantages concerning liability, government laws and regulations, and taxation

Restaurant/Bar Business

Lou, Jose, and Miriam could create either a corporation or a partnership. With this situation the likely choice is a limited partnership. Lou and Jose will be general partners and handle the daily operations of the restaurant. Miriam will be a limited partner and invest capital into the business venture. Miriam will keep rights involving management of the business. Jose and Lou will share the burden of unlimited personal liabilities because of their general partner status. Miriam will only be liable up to the capital she contributed. The general partners Lou and Jose are liable to satisfy the creditors’ demands if the partnership becomes insolvent and each of the three partners are responsible for filing profits or losses on his or her individual tax returns.

Laws and Regulations, and Risk

The Uniform Limited Partnership Act establishes the provisions regarding the formation, operation, and dissolution of limited partnerships in the state that the partners have their principal business (Cheeseman, 2010). The three business partners should complete a limited partnership agreement, which establishes...