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Sally Gomez is interested in starting a new business
Sally Gomez is interested in starting a new business. Although Gomez has developed her business plan and is ready to implement her ideas, she lacks the necessary finances to begin her new business. Along with a lack of finances, Gomez worries about the potential liability involved with starting a new business. Gomez would hate to lose all that she has personally accumulated to date in the event of a successful lawsuit against her. She is considering a sole proprietorship, a partnership, or a corporation as the organizing structure of her new venture.
Which type of business would best serve Gomez's needs at this given time? Which type of business structure would be the worst?
Expert Solution
Sally Gomez's case would best fit the corporation structure. She lacks finances and hates losing her property. With corporation structure, it has many owners, and the amount of capital needed to start the business is distributed among the members. The option will relieve the burden of getting finances. In case of risk, the same concept will be applied where it will be divided amongst the shareholders, thus reducing her burden of losing her property.
The worst structure is the sole proprietorship. With these options, it means that Sally Gomez will have to raise her capital alone, which is a challenge. Also, there is a risk of losing her property if the business fails.
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