Business Legal Environmen(230) Essay Example | Topics and Well Written Essays - 1250 words

Business Legal Environmen(230) - Essay Example As such to the disadvantages will now be discussed. The first of these is with regards to the fact that the sole proprietorship is very unlikely to garner any number of investors. This is due to the fact that investors are ultimately leery of investing in the business venture whose decision-making structure and ownership is all concentric upon single individual. Similarly, a secondary drawback is concentric upon the strength that has already been listed; the fact that all responsibilities and business decisions necessarily fall upon the shoulders of the sole proprietor. As such, sole proprietorship oftentimes places an undue level of stress and anxiety upon a single individual and therefore makes it impossible for him/her to both manage the business and maintain any semblance of a normal life. 2. With regards the advantages of a corporate business entity, the first of these is with regards to the fact that it is much easier for this entity to gather and raise money from investors. Du e to the fact that a pooling of capital and/or property can be rapidly affected within such a means, it is likely that such an entity will be able to garner a relatively higher level of investment as compared to the other entities thus far discussed. Likewise, a secondary advantage of the Corporation is that unlike the sole proprietorship, the individual shareholders are not personally liable for any debts that the corporation might incur during its operation. Conversely, one of the distinct disadvantages of the corporate business entity is with regards the fact that it is liable for a double taxation. The reader can understand this to mean that the profits of the Corporation are taxed as well as the individual shares that the stakeholders earn as a form of dividends/payments/salary. A further disadvantage is with regards to the fact that not all stakeholders will have an equal share with regards to a voice in how appropriation is wrong. As a function of the fact some shareholders w ill have a much stronger voice and level of ownership, their decisions will be taken much more seriously than those with a lower level of ownership or shares. 3. With regards to piercing the corporate veil, this most directly refers to the legal decision and ability to assume that the rights or duties of incorporation are also the rights and duties of its stakeholders. In this way, the reader can understand why a corporation is typically viewed as a separate legal person; completely and entirely responsible for the debts that it incurs as well as the credits that it is owed. Ultimately, the decision to understand the Corporation as a separate person is only pierced when an exceptional situation arises that forces the law to consider the Corporation in a non-personhood manner. More often than not, litigation with regards to piercing the corporate veil is generally concentric upon the level and extent to which wrongful conduct, proximate cause, or unity of interests might have been vi olated within the initial startup or subsequent actions of the Corporation. Similarly, as was briefly discussed above with regards to the disadvantage of entering into a corporate entity, the double taxation standard will be briefly discussed below. Firstly, whereas a sole proprietorship only allows for the individual to be taxed upon their earnings, the Corporation, regardless of its size and the number