«Forms of Business Ownership» - Great Essay Sample

Swimming Pool Repair

Some businesses have more stringent requirements at the initial stages compared to the others types. For a new swimming pool repair business, the best form of business ownership would be a corporation because this type of business requires huge capital, including but not limited to social capital. Similar to the other types of corporations, a swimming pool repair business will have strict licensing requirements based on various factors, such as compliance with health and safety standards, for example. It implies close monitoring by regulatory authorities. Nevertheless, most states allow the owners to hire themselves as company’s employees giving them an opportunity to be included in the firm’s funded employees benefit plans (Nickels, McHugh, & McHugh, 2015). In addition, liability is directed toward the company instead of the owners which means that the latter are protected from assuming liability in case anything goes wrong. Thus, the assets of the owner cannot be used to settle monetary obligations of the corporation. The fact that it is easier to sell stock in an effort to raise capital also makes it feasible to register a swimming pool repair business as a corporation given its high capital requirements (Nickels, McHugh, & McHugh, 2015).

Flower Shop

Running a flower shop requires relatively low starting capital compared to the other types of business. However, the risks may be higher given the perishable nature of cut flowers and the amount of labor needed to maintain the freshness of the products. Therefore, an entrepreneur seeking to open a flower shop may choose partnership as a form of business ownership. If it is well established, this form of business ownership will allow the partners to share the risks. For example, an entrepreneur may seek partnership with a farmer to ensure timely delivery of quality flowers. In addition, partnerships are easy to establish and are subject to reasonably few legal requirements. Furthermore, it is possible to raise additional capital by introducing new partners. Finally, easy dissolution ensures that an entrepreneur is not tied to the partnership agreement very much, and product liability is not a major concern (Nickels, McHugh, & McHugh, 2015).

Child Care Center

A general partnership would be the most appropriate form of business ownership in the case of a child care center. Operations in a child care center encompass different aspects ranging from learning and development to satisfying various health needs of the children. As far as this form of business ownership is concerned, management responsibility as well as liability is divided among the partners. Similarly, profits and losses are divided according to the partnership agreement. The new business will also benefit from the partners with complementary skills (Nickels, McHugh, & McHugh, 2015). For example, a partner who is a professional teacher can become an indispensable employee in the new business. More importantly, partnerships are easier to establish as well as dissolve if such need arises. Moreover, it is also much simpler to raise additional capital by enlisting another partner, and the profits flow directly via the personal tax returns of the partners.

Car Repair Shop

A car repair shop is easier to open and maintain as a sole proprietor. A sole proprietorship is not difficult to open, and the process does not adhere to strict legal requirements. Normally, this form of business ownership requires only a city tax license, thus making it affordable. The business owner or sole proprietor is fully responsible for making all management decisions and conducting various business operations (Nickels, McHugh, & McHugh, 2015). Similar to the case of general partnership business, the profits flow through the owners’ personal tax returns. Finally, sole proprietorships are also easy to dissolve if there is a need as, for instance, in the case of the business owner’s death or lack of any financial success.