Question

What is the best legal form of business? Watch the below video and read the lectures notes. Pay attention to the pros and cons of each legal form of business. Based on your readings, what legal entities that you would recommend for the following people. Explain why:

John has a new invention and is heading to the shark tank to woo investors

Kate is a college student who does graphic design on the side

Anna, a full-time nurse, want to partner with her friend from Italy (will be visiting the US for the first time in two weeks) to start an Italian restaurant

https://www.youtube.com/watch?v=A-Up-JUkaj0

Answer 1

After going through the video and as per my understanding, I would suggest the following entities to the following people.

Since John has a new invention it is better for him to go with a sole proprietorship form of organization because its a new invention and the possible outcomes may not be assessed clearly and also the legal procedure's are very less , if he succeed in proper implementation of his invention, then he can change his form of business into a Partnership or an LLP which would be better in later stages and as of now I would recommended him to start a Sole Proprietorship Concern.

As Kate is a college student and does graphic design on the side it is advisable for him to go with a Sole Proprietorship because there are low legal requirements and can be started with a small amount of capital and also he will be the only person, he can have full access as per his choice, it is also easy to manage.

I would recommended Anna to go with an LLP because she was a full time nurse and also willing to partner with her friend in order to start an Italian restaurant and by doing so, she can do her job as a nurse without breaking her normal work routine by contributing the amount and after completing her work she can spend the rest of time in the restaurant by discussing the same with her friend such that both of them would be benefitted .