Business law 2 - Book Report/Review Example

306). A sole proprietorship denotes an entity owned by a single individual. Usually, it is considered the easiest business entity option with limited legal requirements. The owner and the business are similar therefore, starting such a business does not require a compilation of paper works with different government agencies. However, this does not exclude a sole proprietor from getting licences and permits. This licence and permits usually depend on both federal and state requirements. The individual owning this type of business has an entitlement to all the profits from the business, but should also take responsibility of any emerging liabilities (Gillies 2004, p. 449). After identifying the most convenient business structure, it is critical for Sarah to decide a name for her business.

Basic research is critical if Sarah is not using her own name in the business in order to avoid infringing trademark rights. Usually, trademark rights apply within the boundaries of a certain region. After the identification of a name, registration of the business name follows with the relevant government agency. After the registration process, an individual is required to run an advert declaring that he or she will be using that name in the business. This is a critical step for Sarah. After the business registration, Sarah needs to secure permits and licences from the federal, state, and local authorities.

Notably, tax registration is critical as well as licences permitting her to deal with computers. Unless Sarah has such permits, her business is considered illegal. It is critical for Sarah to develop a business plan comprising of balance sheets, cash flow analysis as well as the statements of her income so that she may have a firm foundation for her business. There is also a need for her to open bank accounts reflecting the business