Discussion Board Question

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Business Law 1 Discussion Board Question
There are three primary forms of business organizations namely sole proprietorship, partnership, and corporations. Each of them has advantages and disadvantages. First, the benefit of individual proprietorship is that setting up requires zero fees and the owner is the only controller of decisions as well as profits earned. However, the disadvantage is that the business owner bears all the liability and debts incurred (Moye 57). Upon death, the authority of the business ceases to exist rendering the company susceptible to disintegration. Second, partnerships have the advantage of creating room for different persons to pull resources together to carry out business. The beauty of partnerships is that there may be no need for formalization of the organizational structure. On the other hand, its main disadvantage is that it comes with unlimited personal liability for every partner involved (Moye 63).
Third, corporations are arguably more protective of individual member investors in the sense that one can raise as much capital as they can with the knowledge investment risks are only limited to the invested capital amounts (Moye 71). It also offers a discrete legal entity from the perpetual life. The main shortcoming of this form of business is that it comes with double taxation and is also very costly to establish and maintain. It demands the filling of annual reports, which can be hectic given that auditing is mandatory (Moye 72).

The various States have their unique requirements for setting up businesses; however, they must be aligned to the federal regulations. In particular, the New York State has a set of procedures that must be aligned to before a business of any kind is incorporated and allowed to operate within the State. Irrespective of the business type, a certificate of incorporation must be filed with the Department of State as the first procedure. The level of personal liability is then determined before the lifespan of that particular business is agreed upon by the applicants and the State. The last step is the determination of taxation qualifications distinguishing between those that must be tax compliant and those that are exempted (New York State Department of State).
Works Cited
Moye, John E. The Law of Business Organizations. Clifton Park, NY: Thomson/Delmar Learning, 2004. Print.
New York State Department of State. Accessed on 6th April, 2018 from https://www.dos.ny.gov/corps/pdfs/formingbus.pdf.