¬¬¬¬¬¬¬¬¬¬¬¬¬ISSUE The issue that needs to be addressed is figuring out which business form would work best with our company. Our firm has 60 employees that collaborate to publish the class magazine. Professor Syska is worried about protecting his personal assets, and therefore needs an analysis on which business form would be more protective for them.
The first form of business is a sole proprietorship, which is the simplest form of business organization. Here there is only one owner of the business and no separate legal entity. The next form of business is a general partnership, or ordinary partnership. A general partnership is an association of two or more persons to carry on as co-owners of a business for profit. Here
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If he were to close the firm due to no profit from magazine sales, he would be solely responsible for paying back all of the debt. This would directly put his personal assets at risk. A general partnership is irrelevant to our decision because Professor Syska is the only owner. This, again, would hold Professor Syska responsible for debt that the company might incur. A limited partnership is irrelevant for the same reason as the general partnership. Professor Syska has no other partners, leaving him responsible for all liability. A limited liability corporation (LLC) would be a good option because all partners are limited and there isn’t one that is solely liable. This means that Professor Syska’s assets wouldn’t be at risk. An LLC has laws that differ depending on which state the LLC is in. Choosing an LLC would mean that our company would need to make sure that the Texas requirements for an LLC align with our needs. A limited liability partnership is irrelevant because, again, we only have one owner. An LLP is typically only used by professionals, which doesn’t fit our company since most of the work is being contributed by students. A corporation doesn’t apply to us as much because we are more of a small business and would not be distributing shares to stockholders. CONCLUSION Because of the circumstances, an LLC would be the best option for our company because it is the business form that puts