The choice of a form of business to invest in is a paramount moment for an individual desiring to enter into entrepreneurship. Various forms of business are suitable for particular individuals with consideration of the situations of these individuals. Factors like the amount of capital, the risks one is prepared to face such as the liability of the business and the ease of formation determine which type of business to undertake. There are several forms of business that an individual can venture into with consideration of their needs. These forms have their advantages and disadvantages to the individual and the business itself (Mancuso, 2011).

I). General partnerships

In this form of business, two or more people join together to form a business to deliver a product or service for the sake of profits. This form of business is advantageous because the tax system related to the business is simplified. These businesses do not pay income taxes rather the partners are required to include them in their tax returns. Moreover, the formation of the business is easy since it only requires a little paperwork. In addition, the partners cannot terminate the business until the date agreed upon during the formation of the partnership (Gaff et al., 2012).

With a general partnership, the ability of attracting investors is limited due to its size and the potential of personal liability. Moreover, partners are liable for the debts and actions of their partners. In addition, the fact that the money used as capital for the business comes from personal investments, reimbursement issues are bound to occur.

II). Limited partnerships

This is a form of partnership composed of one general partner and others referred to as limited partners. The advantages of this form falls to the limited partners in terms of liability, however, the general partner is liable up to his or her private property in case the business falls into a debt. Moreover, the general partner has the advantage of overseeing the overall running of the business. This development gives them the influence over the operations of the business. The other advantage of this form is that it does not pay federal or state taxes (Mancuso, 2011). In addition, the general partner and the occurrence of particular activities that derail its operations determine its termination.

The main disadvantage is the liability that falls to the general partner. Moreover, the control given to the general partner can become a disadvantage, especially when that partner uses her powers negatively. They also have more paperwork when starting it, unlike the general partnership.

III). Limited liability partnerships

In a limited partnership, a general partner is the only active member who is actively involved in the management of the company. However, in a limited liability partnership, all the members have the right to oversee the running of the business. The main advantage of an LLP, especially in the United States is the limited liability afforded all its members. Another advantage comes when the management and responsibilities of the company can be shared among the members, although this is a personal decision on the part of the members (Gaff et al., 2012). Just like the other forms of partnerships, LLPs are only taxed once.

The disadvantages of this form of business come when members are required to pay for self-employment taxes. Moreover, since it is a relatively new form of investment, it is bound to be affected by upcoming laws. It also has a problem with tons of paperwork during startup (Gaff et al., 2012).

Conclusion

Since you want a business entity that will ensure the insulation of your family’s assets from its debts, a limited liability partnership is the preferable choice. In this form of business, Gloria’s personal property cannot be tampered with in the case of liabilities in the investment. Moreover, you can have the responsibility of managing the company since none of your would-be partners, with the exception of your fatherwants an active part in the running of the company.

References

Gaff, B. M., & Fryzel, K. P. (2012). Starting a Business: Which Entity Structure Is Best for You?.Computer, 45(10), 10-12.

Mancuso, A. (2011). LLC or corporation?: how to choose the right form for your business (4th Ed.). Berkeley, CA: Nolo.