1. If you were creating a business, which form of business entity would be most appealing to you and why? 2. Imagine that a friend tells you about their idea to start a sports therapy clinic which they plan to operate as a sole proprietorship. What benefits and risks would you advise your friend to be aware of?

Question 1

There are various types of business entities that one may prefer when starting a business; however, on a personal level, a sole proprietorship is a preferred form of business entity as it is the most straightforward business under which an individual can operate a given market. It merely describes a natural person who possesses the company and is personally charged with the responsibilities of its debts. This is the best form as it is accessible and simple, easy to start and supposed cost with the sole proprietor only needed to index his or her name with safe local licenses (Crusto, 2001). The holder of a sole proprietorship significantly signs agreements in his or her name, since the owner has no other identity under the policy. The sole proprietor holder will also have consumers write checks in the owner’s name, even if the business utilizes any fabricated name. Therefore, these are some of the primary reasons why sole proprietorship form of business entity is preferred.

Question 2

Operating a sports therapy clinic as a sole proprietorship contains various advantages and disadvantages that ought to be put into consideration before starting any business. Therefore, in this case, my friends should be aware that operating under sole proprietorship is simple and effective to form. With this form, one individual is charged with the responsibility for the entire institution’s profits and debts. There should also be aware that in becoming one’s manager and run the industry from home with a minimal physical storefront, a sole proprietorship enables one to be in total control. On the other hand, there are problems associated with this form of business including an individual getting liable for the entire operations in the business’s name. Hence, any damages made within the industry will result in the individual getting sued for the damages.  

References

Crusto, M. F. (2001). Extending the Veil to Solo Entrepreneurs: A Limited Liability Sole

Proprietorship Act (LLSP). Colum. Bus. L. Rev., 381.