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Legal Form

Legal Form In order to choose a legal form of business organization Philbert has to consider some aspect of business such as tax, risk, liabilities, money involve, management and size. Since Philbert and his wife are the only one who is going to be involved in this risky toxic waste disposal business, they should definitely avoid as a sole proprietorship. Because if the business fail or face lawsuits they will be liable for the unlimited loss where their personal wealth will not be protected. As we see in the scenario, there are no partners involve, I do not consider a partnership business also (Partnership also have an unlimited liabilities). The best legal form of business organization for him should be a limited liability company (LLC). LLC is a business enterprise that offers the limited liability of a corporation but the tax advantage of a partnership. The important advantage of LLC is that it does not pay taxes on an organization. The profit from a business are passed through the LLC and paid personally by company members, in this case by Philbert and his wife. Another important advantage is that the liability of member is limited to the amount of their investment. In LLC, members are allowed to participate fully in management activity. Foreign investors, corporation and partnership can also be a LLC member while there is no limitation on the number of LLC shareholder members. Since both Philbert and his wife are involve in the business, they have to consider the important matter such as tax and liability and LLC will satisfy the both of their important matter. Bibliography:

Word Count: 266