Dealing with business organizations today.Liability is a major factor in determining what form of business is the best for a particular situation.
Business organization possibilities include:
- Sole Proprietorship
- Partnership
- Corporation
Sole proprietorships are one person conducting a business for profit. They are easy to start, but the proprietor has unlimited liability.
Partnerships are businesses run by two or more people. A partnership in Texas must have at least one general partner. The general partner bears major responsibility for business activities, and has corresponding liability.
Corporations are the most protective organization type. Liability is limited to personal investment. Corporations are their own legal entitites. A business can only be incorporated in one state. To do business in other states, it must get a permit in each state. Corporations must have an annual meeting of stockholders, wherein officers are decided, dividends are assigned, and so forth.