Discussion Questions/paragraph Format

As you think about the forms a business can take, consider as you read this chapter the balance of factors you need to take into account as you form that business to decide solely based on cost or ease of formation, or personal liability or legal restrictions is dangerous. All of these factors, and others, need to be taken into account. The most important determinant of what form a business should take is the stage and size of a business. Most businesses start small and grow gradually. In the early stages of a business, personal liability is not a big worry and the business will not be raising money by issuing stock. At this stage, a sole proprietorship or a partnership would be appropriate, as they are relatively simple and inexpensive to form and maintain. A corporation is not only complicated to form but it is also costly to operate. Personal liability and protection from court judgements might be a priority in risky business ventures. If a business will have several owners who are required to share in management duties an LLC is flexible enough to accommodate such arrangements. As the business grows and matures, it requires huge amounts of