Essay On Business Entities Regulations

Business Entity Regulations

Business activity may be conducted through a variety of organizational structures or entities. Whichever business structure is selected will determine the legal requirements or regulations with which the business owner is required to comply. In selecting an organizational structure, protecting the business owner from liability is a primary consideration. “Other considerations are the transferability of ownership rights, the ability to continue as a business in the event of the death or withdrawal of one or more of the owners, the capital needs of the business, and tax liabilities.” (Utah.gov) The most commonly registered business Entities in Utah are sole proprietorships, general partnerships, limited partnerships,

Each partner shares the profits and losses while contributing their labor and skills to the business. “General partners have a fiduciary duty of loyalty and trust to the other partners and must subordinate their personal interests to those of the partnership.” (Utah.gov) In order to create a general partnership there must be an agreement, but there are no formalities necessary. If partners conduct business under an assumed name, they have to file the business name with the Utah Division of Corporations and Commercial Code. Although there are no formal requirements with regards to the agreement, the partners should take action in creating a formal written agreement to protect their interests in the event of a

Corporations are entities created with the permission of the state and have certain rights, privileges, and liabilities beyond those of an individual. Shareholders are the actual owners of the corporation and elect the directors that establish policies. Doing business as a corporation can have tax or financial benefits, but there are other fees and considerations to consider.

Limited Liability Company (LLC)

“A limited liability company ("LLC) is a new form of business entity that combines the operational flexibility and tax status of a general partnership with the limited liability protection traditionally associated with limited partnerships and corporations.” (Utah.gov) The LLC offers the most operational flexibility. It may be an incorporator, general partner, limited partner, applicant of a DBA, or a manager of any corporation, partnership, limited partnership or limited liability company. Members are not personally liable for the obligations of the LLC. However, An LLC is subject to disclosure, record keeping and reporting requirements that do not apply to a general partnership. LLC's are organized by filing in accordance with the state Articles of