Business Formation of Potential Cardigan Home Store A partnership, sole proprietorship, and incorporation are three types of business ownership. (Miller 444) Sole proprietorships can be operated and owned by the same person. Then again, an entrepreneur may claim sole proprietorships; however they may acquire a supervisor to run the business daily routine. The sole proprietor tracks every profit made from the business and is responsible for any losses that may occur.
Of the three types of ownership, the sole proprietorship is the most demanding. When considering a business one of the crucial starting points should be the registration and business name. (Miller 445) The name of the company should be agreeable to both parties. When considering a business adventures contemplate on the numerous advantages of being an entrepreneurs. •It is easy to start Sole proprietorships. he/she makes all the decisions regarding the company • The proprietor owns the company • The proprietor has control of all aspects of the business · The proprietor gets all the profit the disadvantage are that: • sole proprietorship is that the proprietor alone bears the weight of any misfortunes or liabilities brought about by the business endeavor. • The proprietor is the main person who can sort out any monies and financing issues. • The presence of the business closes upon the proprietor’s demise.
A partnership is an association of two people or more to take on as co roprietorship of a business for profit. The Uniform Partnership Act (UPA) has been accepted by the state to offer a level of consistency in the state with respect to partnership laws (Miller 446). One of the things that should be done when two or more entrepreneurs are considering a partnership is to compose a partnership statement. This statement agreement should lay down any and all expectation that the business requires from the partners of the company. Example detailed responsibilities of who are responsible for each part of the business.
There are various types of Partnerships; the general partnership, which assumes responsibility for managing the partnership and so has full responsibility for the partnership and for all of its debts. (Miller 452) and limited partnership contributes funds or other property and owns an interest in the firm but does not undertake any management responsibilities and is not personally liable for partnership debts beyond the amount of his or her investment. (Miller 452) are the well-known in the business world. A partnership may end for any number of reasons.
Whenever a partner leaves the partnership, the partnership agreement is ended. The law additionally shows the end of partnerships under particular position (Miller 447). Upon the passing, bankruptcy or mental capacity of a partner. The partnership may be ended if the purpose of the business is resolved to be unlawful. The advantage circumstances are: • Start-up can be simple since the law does not generally require a partnership agreement · Partners has the responsibility of making decision, regarding administration, and capitalizing the business.
The disadvantage are: • high percentage of partnership leaving the business. Partners bears the unlimited financial obligation. • Each partner accepts obligation for the mistakes of his or her partners. · Partners must equally share profits. A corporation is considered a legitimate entity that is governed by law. As a artificial person, a corporation can perform every one of the errands that a genuine person can do, similar to pay expenses, collect obligation, go into contracts, be considered responsible for carelessness and make a profit. (Miller 462) A corporation must be developed by one or more people. The shareholders record Articles of Incorporation with the Secretary of State.
The minute the Articles of Incorporation are in place, the pay state charges for incorporation (Miller 489) At the point when the sum total of what necessities have been met, a state official ordinarily the Secretary of State – issues the sanction. (Miller 467) Entrepreneurs should have a lawyer document the papers. (Miller 457) Attributable to the legitimate structures of corporations, there are various focal points: · 1st Limited liability – In the corporation, the shareholders’ requirements for liability, duties, and claims are restricted to the measure of cash invested resources into the purchase of product.
Raise capital – the capacity of a corporation to raise extra capital by means of the offer of supplies is an extremely critical point of interest of this structure or ownership. Pioneers are more ready to advance cash to corporations than a sole proprietorships or partnerships. •Transferable ownership – since shareholders don’t deal with the business, ownership can change through the purchasing and offering of stock without disrupting the regular business of the corporation. The best business association that would be appropriate for the Cardigans is partnerships.
Since there are two of them; everything will be divided equally. Both individuals will be responsible for all aspect of the company’s business. The names Homigans Fine Home Furnishing and Cardihome Furnishing are great names reasons being neither of them has been used by another entity and they are both different. For a company the name should be unique so the company won’t have problem later. The only dilemma may be because they didn’t incorporate their names, in the corporation it is necessary to register the name of the Article of Incorporation so the name will be forever theirs. (Miller 467)