Legal Underpinnings of Business Law

Imagine that you own each of the following businesses:

Tinker’s Home Security Service (sole proprietorship)
Tinker & Tailor’s Home Security Service (general partnership)
Tinker & Tailor’s Home Security Service (LP)
Tinker & Tailor’s Home Security Service, Inc. (corporation)
Tinker & Tailor’s Home Security Service, LLC (LLC)

The businesses are being sued for breach of contract. Create a matrix that lists each business, and compare and contrast your personal liability exposure as an owner as a result of the lawsuit.
For each business entity, analyze how you might limit your liability exposure as an owner.
Describe a business that you may own some day or that you currently own. (Even if you never plan to own a business, pretend as if you will do so for the purposes of this assignment.) Examine the best business organizational form for the business that you have described, including in your examination personal liability exposure, management, taxation, and ease of formation.
Submit a four- to five-page paper (not including title and reference pages). Your paper must be formatted according to APA style as outlined in the approved APA style guide and you must cite at least three scholarly sources in addition to the textbook.

Solution Preview

Business Entity and Personal Liability Exposure Matrix
NAME OF THE BUSINESS Type of Business Entity Personal Liability Exposure
Tinker’s Home Security Service Sole Proprietorship I would be more exposed to any liability for any debts which will be incurred by the business. The reason behind this is because the business and I as the owner of the company will be regarded as the same entity. Hence, I will have unlimited liability.
Tinker & Tailor’s Home Security Service General Partnership I would be equally liable for any debts which may be incurred by the business.

(1,513 words)