Legal Underpinnings of Business Law Essay

The key to limiting liability exposure is to realize where your comp all great power be vulnerable. It is important to be able to recognize possible situations that key a company vulnerable. Knowing all possible significant aspects of any liability associated to the type of business an owner wants to participate in is vital. A business owner should always understand and have working knowledge of all laws that apply to your business to prevent liabilities. Personal Business riskMy future personal business venture would a clothing identify for curvy women. As a curvy woman, it is very difficult to come upon non-geometric, non-tent like, flower patterned, ugly business and casual clothing. The best business organizational form for this business would be an LLC. LLCs are easy to rear up. Chose a business name that incorporates LLC, file an article of organization, create an operating(a) agreement, obtain licenses and permits, hire employees, and finally open the doors.I would hav e change of partners from textiles, designers, clothing producers, managers, and finally marketing specialists. The personal liability exposure would be minimal. With an LLC if I messed up the partners would not be responsible. The consequences are not as bad is if I was in a jackpot. The LLC is more flexible. The positives are slight record keeping and more profit sharing. The state would have both(prenominal) say into my company so I would have to keep up with guidance regularly.The negative of this company is that once a member leaves, the spotless company moldiness complete their duties and responsibilities and then dissolve. Another down assume is that self-employment evaluate contributions towards Medicare and Social Security. The net income of the LLC is subject to this tax. The federal government does not recognize LLC as a business entity for taxation purposes, all LLCs must file as a corporation, partnership, or sole proprietorship tax return. Certain LLCs are autom atically classified and taxed as a corporation by federal tax law.