Rod is starting a new business as a drystone mason where he builds and repairs rock walls that do not have any mortar. He has completed national certification and will be working most jobs by himself. What issues should he consider in choosing the legal form? Based on this information, what legal form would you recommend for him to choose?
What will be an ideal response?
Issues would relate to the amount of liability to the owner, the business continuity, how the business ownership could be transferred, management control, the need to raise capital and income tax.The company form would be a sole proprietorship based on:- the company being so small (one employee);- the work having limited liability;- the business being dependent on his knowledge and therefore difficult to continue upon his death or his desire to leave the business; and- there being a limited need to raise capital.
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What will be an ideal response?