Business Structures and Laws: An Introduction

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Contents
Part 1................................................................................................................................................3
Part 2................................................................................................................................................5
Introduction..................................................................................................................................5
Business structures and the laws applicable on them..................................................................5
Conclusion...................................................................................................................................7
Part 3................................................................................................................................................8
Introduction..................................................................................................................................8
Comparison of different business structures................................................................................8
Conclusion...................................................................................................................................9
Part 4..............................................................................................................................................10
Bibliography..................................................................................................................................12
Articles/ Books/ Journals...........................................................................................................12
Legislations................................................................................................................................12
Others.........................................................................................................................................13

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Part 1
In order to undertake this part of the assignment, I visited my friend’s mother, i.e. Anna’s
mother, Julie. Julie is a very creative person and is very skilled in terms of designing the pottery
creations like vases. I have known for quite some time that Julie had a deep interest in starting up
her own business and this assignment provided me with the best opportunity of gaining an
insight on the things which were stopping Julie. The following are the excerpts of the discussion
which was undertaken between me and Julie, particularly in context of starting up a business and
the selection of business structures.
Question: Anna told me that you have been thinking about transforming your skill set in a
business for a number of years and yet you have not taken any step in this regard. Is there any
problem?
Answer: As such there is no problem but I am not sure about a number of things. I do not know
on how to start a business. Particularly I do not want to be indulged in any kind of hassle. This is
the reason my dream of doing something in this context is still not fulfilled.
Question: What is the hassle which you think would come?
Answer: Actually, a few years back, when my husband was still alive, he had a colleague who
had left his job to start his business. He started this business with one more person and there
business was working fine for the first six months. But I do not know what happened, but my
husband told me that due to some change in the law, the two had to change their way of doing
business. This new was costlier and ultimately their business failed. Even their homes had to be
sold off. The main loss was born by my husband’s friend as the other person in business declared

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himself as bankrupt just before the business was ending. My husband’s friend lost everything
and we had to support him for a long time. I cannot take such risks, as I am a single mother now
and have to look into my and Anna’s financial situation on my own.
Question: Okay! But one bad experience should not stop you from going after your dreams.
Have you thought about anything? Or do you have any particular mindset for setting your own
business?
Answer: Well, after this incident, one thing is for sure, that I want to work alone. I do not want
all the liabilities to be imposed on me when I share my profits with another person. And yet, I am
uncertain of the finances which I require to start my business. I want assistance in my business
but I want to have the full control. I know this is asking too much but I am not sure how I can
manage all of these requirements in my business. I want a good flourished and yet a small shop
just down the 5th Avenue, where I sell my work and make creative designs on pottery for my
clients based on their personal requirements.
Question: Do you have any savings which you can invest in the business?
Answer: Fortunately, my husband left me with good enough savings to life a good life and even
support Anna till a long time.
Question: Do you have any present loans or mortgages?
Answer: No-no. I have no dues on anyone.
Question: Then I think you are in the perfect condition to open up your new business. Do you
have any knowledge about the different business structures which you can opt?