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BUS FP3021 McAndrewVanessa Assesment5 Attempt1

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Running head: BUSINESS ENTITY IMPLICATIONS FOR CONTRACTS 1
Business Entity Implications for Contracts
Vanessa McAndrew
Capella University

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BUSINESS ENTITY 2
Business entities
Introduction
Business organizations in the industry take different forms. This is majorly determined by
the way they were formed and the legal capacity of them. There exist four major business forms
in the industry which entrepreneurs form to operate in the industry. These includes; Sole
Proprietorship, Partnership, Corporation and Limited Liability Company (LLC). The type of
business that an entrepreneur intends to start has its own pros as well as cons. As such, the
entrepreneurs should, therefore, make considerations of the benefits of each form of the business
organization before investing in them. This will ensure the entrepreneurs achieve their set goals
and objectives. The legal capacity of the business organization will also enable the investors to
determine the whether they are interested in investing in it or not.
Sole Proprietorship
This form of business enterprise is formed and operated by a single person. Even though
the business enterprise can get support from family members, the decision-making role is held by
the owner of the business (Zimmerer, Scarborough & Wilson, 2005). The management of the
business also lies with the owner. The business is structured in such a way that the owner of the
business firm is responsible for managing the day to day operations of the firm. Such business is
also not recognized as legal entity hence all the powers to make contracts lies with the owner.
The owner has the power to enter into and sign a contract hence making it valid. The owner of
the firm can create and negotiate a contract. As such, the owner is also liable for any liability
associated with the contract. In case the owner of the business wants to sell it, he doesn’t have to
consult anyone as he or she has the power to enter into a contract to sell the business on his own.
The decision to sell the firm does not have any effect on the operations of the business enterprise.

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Running head: BUSINESS ENTITY IMPLICATIONS FOR CONTRACTS Business Entity Implications for Contracts Vanessa McAndrew Capella University 1 BUSINESS ENTITY 2 Business entities Introduction Business organizations in the industry take different forms. This is majorly determined by the way they were formed and the legal capacity of them. There exist four major business forms in the industry which entrepreneurs form to operate in the industry. These includes; Sole Proprietorship, Partnership, Corporation and Limited Liability Company (LLC). The type of business that an entrepreneur intends to start has its own pros as well as cons. As such, the entrepreneurs should, therefore, make considerations of the benefits of each form of the business organization before investing in them. This will ensure the entrepreneurs achieve their set goals and objectives. The legal capacity of the business organization will also enable the investors to determine the whether they are interested in investing in it or not. Sole Proprietorship This form of business enterprise is formed and operated by a single person. Even though the business enterprise can get support from family members, the decision-making role is held by the owner of the business (Zimmerer, Scarborough & Wilson, 2005). The management of the business also lies with the owner. The business is structured in such a way that the owner of the business firm is responsible for managing the day to day operations of the firm. Such busines ...
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