A business entity is an organization that uses economic resources or inputs to provide goods or services to customers in exchange for money or other goods and services.
There are three main types of businesses are sole proprietorships, partnerships, and corporations. Each of these entities has its own advantages and disadvantages.
Sole proprietorship – This is a type of business that is usually owned by one person and adopted by small business entities. It is an unincorporated business owned and run by one individual with no distinction between the business and you, the owner. It legally has no separate existence from its owner.
Advantages of Sole Proprietorship
1. Easy to create and maintain
2. Business and owner are the same entity. …show more content…
If there are many investors having no clear majority interest, the management team of a corporation can operate the business without any real oversight from the owners. Looking at all these options that Jeb and Josh have, I would recommend that Arcadia Sports create their business as either a Partnership or a Limited Liability Company. A Limited Liability Partnership would be the best option because they will have one general partner - Josh who manages the business, and one limited partner - Jeb who is the financial backbone of the company and just an investor in the business.
However, if Arcadia Sports were to be a limited liability partnership, Jeb is not personally liable for Jane's injury since he does not participate in the daily management of the business, which is a common characteristic of limited partners. This leaves Josh as the general partner, hence personally liable to Jane for damages. If they had started an LLC and filed it correctly and managed it as a separate legal entity from their personal assets, then they both cannot be held personally liable because they will be considered a separate legal entity from the
There are three main types of businesses are sole proprietorships, partnerships, and corporations. Each of these entities has its own advantages and disadvantages.
Sole proprietorship – This is a type of business that is usually owned by one person and adopted by small business entities. It is an unincorporated business owned and run by one individual with no distinction between the business and you, the owner. It legally has no separate existence from its owner.
Advantages of Sole Proprietorship
1. Easy to create and maintain
2. Business and owner are the same entity. …show more content…
If there are many investors having no clear majority interest, the management team of a corporation can operate the business without any real oversight from the owners. Looking at all these options that Jeb and Josh have, I would recommend that Arcadia Sports create their business as either a Partnership or a Limited Liability Company. A Limited Liability Partnership would be the best option because they will have one general partner - Josh who manages the business, and one limited partner - Jeb who is the financial backbone of the company and just an investor in the business.
However, if Arcadia Sports were to be a limited liability partnership, Jeb is not personally liable for Jane's injury since he does not participate in the daily management of the business, which is a common characteristic of limited partners. This leaves Josh as the general partner, hence personally liable to Jane for damages. If they had started an LLC and filed it correctly and managed it as a separate legal entity from their personal assets, then they both cannot be held personally liable because they will be considered a separate legal entity from the