New Invention Business Environment Legal Essay

Pages: 3 (925 words)  ·  Bibliography Sources: 3  ·  File: .docx  ·  Level: College Junior  ·  Topic: Business

SAMPLE EXCERPT . . .
This is one of the most popular forms of business for companies that a larger or that have substantial amount of capital invested in their companies. However, these are generally more complicated to run because of the added requirements necessary to organize the company as a corporation as well as the additional tax requirements in many cases.

One unique business form that bridges some of the advantages of a corporation with the flexibilities found in sole proprietorships is known as a limited liability company. A limited liability company, or LLC, is similar to a partnership but has the legal protections of personal assets that a corporation offers without the burdensome formalities, paperwork and fees; however the exact rules for forming an LLC vary by state (The Wall Street Journal, N.d.). The LLC form was introduced as a way to spur more small business investments and start-ups because it reduces the personal liability that an individual might have and therefore works to reduce the risk that would be found in starting a small business.

The LLC is an ideal way for small businesses to organize themselves. There are also similar arrangements for partnerships and corporations as well. Depending on elections made by the LLC and the number of members, the IRS will treat an LLC as either a corporation, partnership, or as part of the LLC's owner's tax return (a "disregarded entity") (IRS, 2012). However, the exact rules can vary by state as well as what type of industry that the company is operating in. Therefore it is recommended that the individual who wishes to pursue his invention seek local consultation before deciding upon the LLC form of the sole proprietorship.

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Many people feel that filling a new business as an LLC is either too complex or too expensive but generally it is not either. Furthermore the advantages definitely outweigh the disadvantages. The advantages of filing a LLC include (BizFilings, N.d.):

Protected Assets

Pass-through Taxation

Heightened Credibility

Limited Compliance Requirements

Flexible Management Structure

Few Restrictions

Essay on New Invention Business Environment Legal, Assignment

Therefore it is recommended that the individual who wishes to organize a small business to pursue his invention do so by forming a sole proprietorship and it also strongly recommended that they consider filing as a LLC as well.

References

BizFilings. (N.d.). Benefits of Create an LLC. Retrieved from BizFilings: http://www.bizfilings.com/learn/creating-llc.aspx

IRS. (2012, December 31). Limited Liability Company (LLC). Retrieved from IRS: http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Limited-Liability-Company-(LLC)

The Wall Street Journal. (N.d.). How to Form an LLC. Retrieved from The Wall Street Journal: http://guides.wsj.com/small-business/starting-a-business/how-to-start-an-llc/ [END OF PREVIEW] . . . READ MORE

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https://www.essaytown.com/subjects/paper/new-invention-business-environment/3098987.