The business forms that are available to Elvern Entrepreneur are sole proprietorship, partnership and corporation. This is because Elvern is reluctant to share the control of the business with others and these forms of businesses offer the space to control your business alone in as much as some capital to start it off is required.
Sole proprietorship is one of the simplest business forms for Pampered Puptown Puppers (PPP) that Entrepreneur can operate. It is not a legal entity and only requires an individual to own the business and be responsible for its debts. The advantages that Entrepreneur will have when he decides to start this type of a business are: he will become his own boss and no one will control the business apart from him which therefore makes the decision making process fast, Elvern is entitled to keeping all the profits without sharing to anyone, the initial capital is low hence one does not strain looking for more money to enable the business to start, sole proprietorship also provides maximum privacy as it is owned by only a single person hence decisions are not based on discussions which will lead to sharing of vital information of the business, establishing and operating a sole proprietorship form of a business is simple as there are no complicated procedures to be followed, the legal structure of the business can easily be changed later if circumstances change, and finally it is easier to wind a sole proprietorship ( Baik & Lee,2015 ). The business also has disadvantages that need to be considered: unlimited liabilities for debts, limited capacity to raise capital, decision making process is tedious as only an individual is involved, an individual get taxed alone and most of the time it is even difficult to go vacations as no one will be left in charge.
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Another form of business that can be practiced with Entrepreneur is corporation. Unlike sole proprietorship, a corporation is a legal entity which is separate and distinct from its owners. They equally enjoy most of the rights of individuals who own their business alone such as hiring employees, they sign contracts, and they are allowed to loan and borrow money among others. Corporations can be grouped in two forms: the C Corporation and S Corporation, and each have distinct able advantages and disadvantages. The C Corporations have the following advantages: the owners have limited liability as their assets are protected from the debts and liabilities of the corporation, it is much easier to use sale of stocks and bonds to attract capital thus making it easier to raise the initial starting fee, even if the owner dies the entity will still exists and most importantly in C Corporations transferring ownership is easier. The disadvantages of C Corporations are: there is double taxation of corporation profits, the cost of forming it is expensive, and there are more state and federal regulations and oversight.
The S Corporation does not have the double taxation instead the owners are entitled to benefits which are tax free, owners also have limited liability, easy transfer of ownership, and they have perpetual lifetimes. The disadvantages of S Corporations is that there is only one class of stock that is permitted, the number of shareholders is also restricted to hundred, the types of stockholders are also limited to individuals, estates and trusts only.
Partnership is also recommended for Elvern Entrepreneur. It is a business with multiple owners who have invested in the business. They can be individuals, schools, organizations with the same interest, business or even governments ( Baik & Lee,2015 ). Partnership can accommodate those who work in the business and those with limited participation as they are divided into two forms: the general partnership and the limited partnership. Advantages of a general partnership includes: the profits or losses of the business are filed by individuals in their personal income tax return hence the business is not taxed separately, it is always easy to establish, the more the members the much easier it is to raise funds in a general partnership, there is wider pool of knowledge and skills thus more contacts, management is improved as there is more than just one person making the decision. The disadvantages that come along side with general partnership are: a mistake done by one partner is suffered by the other partners too, the partners are liable for the debts and obligations of the business, transferring interest in the business is quite difficult as the other partners have to approve of it first, it is easier for partnership to be unstable incase a partner withdraws or is unstable.
Advantages of a limited partnership include: investors are easy to attract due to the limited number of partners which leads to having limited liability to the business debt, partners are taxed profits and l9osses on their personal income tax returns, and the limited partners do not have to participate to the business itself when it comes to sharing profits and losses. The main problem here is that the limited partnership needs certificate to be filled before it comes into existence. This always includes the state filing fees.
Among the three listed forms of business, I would recommend that Elvern settles for the sole proprietorship. This is because Elvern is reluctant to share a business with others and this will only involve him alone. Concerning the capital issue, sole proprietorship is also the best since there is little capital required as compared to the rest.
Reference
Baik, Y. S., Lee, S. H., & Lee, C. (2015). Entrepreneurial firms’ choice of ownership forms. International Entrepreneurship and Management Journal , 11 (3), 453-471.
