Forms of Business Organization - 2291 Words

Forms of Business Organization Western Governors University The study of business organization is a study of complexity: as each business is different, each form of business organization is also unique. From a local hot-dog vendor to a trucking company, from a restaurant to a multinational, each business has different legal, moral and ethical concerns, and there is no one-size-fits-all approach to determine how a business should best be organized. Take the first two businesses, the hot-dog vendor and the trucking company, as an example: assume that each business is operated by a single individual. While one may argue that the proper form of organization for each would be a sole proprietorship, that would not be the†¦show more content†¦Additionally, because the actions of one of the partners are binding on all the others, the entire partnership can prosper or suffer due to the actions of a single member (The Free Dictionary). Also like a sole proprietorship, a general partnership is, as Quick MBA puts it, a â€Å"?...tax reporting e ntity, not a tax paying entity.†? In other words, the partnership is only a method of business organization; it is not a legal entity for tax purposes, and the individual business owners assume tax liability separately. The longevity of a partnership is potentially greater than a sole proprietorship: for example, since there are one or more other partners, the death of one member does not mean the end of the business since their share can be passed along to heirs. Control in a general partnership is shared equally: since there is no one owner, all decisions (and their effects) are shared equally. Profits are divided among the partners: while the liabilities are shared, the profits can sometimes be divided unequally upon agreement. This can affect return on investment: since it is possible to invest in a partnership without being an active member, it is possible to lose money on an investment if the active principals make decisions that affect the business negatively. As with a sole proprietorship, location is not a real concern with a general partnership: since the principals, not the business, are the ones responsible for the tax liability, theShow MoreRelatedForms of Business Organization2303 Words   |  9 Pagesï » ¿Forms of Business Organization a) Sole Proprietorship This is in basic terms a business entity or enterprise owned and perhaps managed by a single individual. Characteristics of a Sole Proprietorship Liability. In terms of liability, the owner of the business is in this case liable in his individual capacity for the debts of the business. Income Taxes. In regard to income taxes, owners of this form of business use their own personal tax returns to report their income as well as expensesRead MoreBasic Forms Of Business Organization1356 Words   |  6 PagesThree basic forms of business organization are sole proprietorship, partnership, and corporation. Sole proprietorship is the simplest form of business organization in which there is only one owner (Cheeseman, 2015, p. 570). Single person is responsible for all debts, liabilities, and obligations, as well as unlimited liability for business operations. If the owner is unsuccessful and acquires debt, creditors can pursue legal action and acquire access to personal bank accounts, real estate, and otherRead MorePartnership : A Form Of Business Organization Essay1774 Words   |  8 PagesPartnership refers to a form of business organization in which two or more parties come together to achieve specified economic objective. Each such party to the organization is known as ‘partner’. The relationship between / among partners is governed by the partnership agreement. Some of the common clauses relating to partnership are capital, profit/loss sharing ratio, tenor, object, inclusion of new partner, retirement / exclusion of existing partner, dissolution of partnership etc. PartnershipRead MoreBusiness Essay Topic: Forms of Business Organizations930 Words   |  4 PagesBusiness Essay Topic: Forms of Business Organizations It is important that the business owner seriously considers the different forms of business organization — types such as sole proprietorship, partnership, and corporation. Which organizational form is most appropriate can be influenced by tax issues, legal issues, financial concerns, and personal concerns. This essay explains the general impression of business organizations. A Sole Proprietorship, also known as the sole trader or simplyRead MoreVarious Forms of Business Organizations and Their Characteristics964 Words   |  4 PagesIntroduction Before starting a business, a business owner should ideally take into consideration the various forms of business organizations and their characteristics. In basic terms, forms of business organization differ on a number of fronts including but not limited to personal liability of owners, ease of formation, etc. This text highlights a number of issues in relation to the various forms of business organization. Part 1 The chart below (chart 1) compares and contrasts my personalRead MoreChoosing the Right Form of Business Organization1574 Words   |  6 PagesChoosing form of business organization Introduction As the business world expanded, there developed a need to categorize businesses into various organizations. Business organization forms were hence established by law and are regulated in their operations. There is a wide range of these business organizations, but the major ones are sole-proprietorship, limited liability companies, corporations and partnerships (Baron Shane, 2008, p. 244). In establishing a business organization entity, thereRead MoreFour Forms of Business Organization 21360 Words   |  6 Pagesfour different forms of business organization. It is a review of the advantages and disadvantages of each form, including the tax, legal, and, accounting implications that surround them. The different type of financial statements associated with each form of business organization is also discussed. In this paper, based upon the synopsis that the government has released funds for creating small businesses, a form of business is chosen by the class member in explaining his business idea. It thenRead MoreOwnership and Structural Forms of Business Organization2526 Words   |  11 PagesOwnership and structural forms of business organization, applicable laws, requirements for their formations, and advantages and disadvantages Type of Ownership * Single or Sole Proprietorship. It is a form of business organization which is owned by one person. The owner personally manages his business. Most of businesses in the Philippines (including those which are not registered) belong to single proprietorship. Examples are retailers, market vendors, barbers, tailors, and so forth. a)  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Read MorePartnership Is An Arrangement Or A Form Of Business Organization Essay1811 Words   |  8 PagesPartnership is an arrangement or a form of business organization in which two or more parties come together to achieve specified economic objective. Each such party to the organization is known as ‘partner’. The relationship between / among partners is governed by the partnership agreement. Some of the common clauses relating to partnership are capital, profit/loss sharing ratio, tenor, object, inclusion of new partner, retirement / exclusion of existing partner, dissolution of partnership etc. PartnershipRead MoreBusiness Organization Business Forms Sole Proprietorship This is the easiest and simplest form of700 Words   |  3 PagesBusiness Organization Business Forms Sole Proprietorship This is the easiest and simplest form of business ownership. The sole proprietorship is a business organization that is owned and operated by a single person (Astrachan, Shanker, 2003). Betty can choose to be a sole trader and the individual owner of the coffeehouse. The business will be unincorporated and Betty will be personally liable for any debts, losses or legal action. On the other hand she will keep all the profits and will also be