BUSSN 6-1

    For this milestone, you will discuss Case Study Three. Identify the main types of business entities, and discuss the advantages and disadvantages of each. Your active participation in this discussion is essential to improving your understanding of the advantages and disadvantages of the various business entities. Actively engaging with your peers will help you complete the remaining critical elements for the final project. 

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Suppose you come up with an idea to produce a novel product you think could lead to enormous profits. But what is the best way to produce this product? Should you do it yourself by creating your own business? Do you have enough money to create your own business? What are the legal ramifications if your business is not successful? What legal responsibilities do you have with respect to your business?

   Perhaps you share your idea with your best friend, who suggests that the two of you become partners in the production and sale of this product. What are the benefits associated with forming a partnership? What are the disadvantages? Are there other forms of business you should consider?

   Choosing the form of business to create is one of the most important decisions an enterprise makes. The extent of liability and control the owner will have depends on the form of the business. The business world is not static, however, and businesses can and do change form over time, so this chapter relates not only to new businesses but also to existing ones. The first section introduces the major types of business organizations, describing how these forms are both created and ended. The second section considers several types of business organizations that are less well known, but important nevertheless.

   In the Jax Restaurant case, the court had to consider the laws of partnership in determining whether to find the partnership as a whole liable. The Uniform Partnership Act (UPA) is the main statute governing partnership law. If there is no express partnership agreement, UPA establishes the rules for the partnership.

   This chapter discusses the creation and operation of the partnership, and the following chapter considers how partnerships are terminated as well as special types of partnerships. The first section of this chapter considers the nature of the partnership relationship, how partnerships are created, and how they function.

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This chapter explains the steps necessary to establish a corporate entity. Although state law generally governs corporations and each state has its own corporate regulatory statutes, the Revised Model Business Corporation Act (RMBCA) is the basis of most state statutes. More than 25 states have adopted at least part of RMBCA. This chapter refers to specific RMBCA guidelines, but remember that not all states follow them.

   The first two sections of this chapter examine corporations' characteristics and powers. The third section describes different classifications of corporations. The next section explains the process of corporate formation and problems associated with it, and the final section covers corporate financing.