...5–7 pages) about the forms of business organizations listed below. Your report should have a subheading for each business form with a brief description of the business form and a brief discussion of the key characteristics, advantages, and disadvantages of that form of organization. Differentiate among the following forms of business by explaining how at least six of the seven key characteristics listed in the introduction to this task apply to each of the following organizational forms: 1. Sole Proprietorship 2. General Partnership 3. Limited Partnership 4. C-Corporation 5. S-Corporation 6. Limited Liability Company SAMPLE FORMAT Sole Proprietorship: Write a brief description of the form of business ownership, advantages and disadvantages. The key characteristics of the form of ownership should be addressed by discussing six of the seven bullet points below. You will want to have the heading as the form of business ownership and then use the bulleted list below for the key characteristics. • Liability • Income Taxes • Longevity or Continuity of the Organization • Control • Profit Retention • Location • Convenience or Burden General Partnership: Write a brief description of the form of business ownership, advantages and disadvantages. The key characteristics of the form of ownership should be addressed by discussing six of the seven bullet points below. You will want to have the heading as the form of business ownership and then use the bulleted...
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...A business undertaking is an organisation which is engaged in some industrial or commercial activity. It represents an institutional arrangement for carrying on any kind of business activity. It may be owned and controlled by a single individual or by a group of individuals who have entered into a formal or informal agreement to jointly conduct the business. Every business undertaking is a separate and distinct business unit. It has its own identity and separate ownership. It can be distinguished from other undertakings on the basis of its ownership, management and control. According to Wheeler, a business undertaking is a concern, company or enterprise which buys and sells, is owned by one person or a group of persons and is managed under a specific set of operating policies". Thus, a business undertaking may be defined as an organisation operating under separate ownership, management and control and carrying on any business activity with independent risk- bearing. All business undertakings are directly or indirectly engaged in the transfer or exchange of goods and services for value. They deal in goods and services on a regular basis. Their main motive is to earn profits and they are exposed to various types of risks. Characteristics of a Business Undertaking The basic features of a business undertaking are as follows: 1. Separate identity: Every business undertaking has a separate identity. It has a distinct name and separate existence. Its assets and liabilities are...
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...University of Phoenix Material Business Entity Matrix Format Business Entity | Issue | | Characteristics | Formation | Liability | Taxation | Global Implications | Sole Proprietorship | One-person entity where debts and liabilities of the business are also personal debts and liabilities of the principal. Simplest form of business organization | No paperwork is required unless local licensing requirements-form to be filed if business name does not contain owner’s name | The owner is fully liable for all debts of the business and personal assets are subject to the claims of business creditors | Not subject to corporate income tax and no tax return is filed on behalf of business. The reports of business income or business loss is based on individual tax rate | The internet has provided more opportunities for even sole proprietors to go global- Collecting money owed can be challenging through laws and regulatory agencies as they differ between countries | Partnership | | | | | | Limited Partnership | | | | | | Corporation | A fictitious legal entity that exists as an independent “person” separate from its principles. A corporation can be privately or publicly held. | A corporation probably has the most formal filing and reporting requirements. In order to form a corporation you have go through state law filing, and formation is governed through state statutes. | Limited liability because the owner of the corporation, stockholders, is not liable for its...
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...A business undertaking is an organisation which is engaged in some industrial or commercial activity. It represents an institutional arrangement for carrying on any kind of business activity. It may be owned and controlled by a single individual or by a group of individuals who have entered into a formal or informal agreement to jointly conduct the business. Every business undertaking is a separate and distinct business unit. It has its own identity and separate ownership. It can be distinguished from other undertakings on the basis of its ownership, management and control. According to Wheeler, a business undertaking is a concern, company or enterprise which buys and sells, is owned by one person or a group of persons and is managed under a specific set of operating policies". Thus, a business undertaking may be defined as an organisation operating under separate ownership, management and control and carrying on any business activity with independent risk- bearing. All business undertakings are directly or indirectly engaged in the transfer or exchange of goods and services for value. They deal in goods and services on a regular basis. Their main motive is to earn profits and they are exposed to various types of risks. Characteristics of a Business Undertaking The basic features of a business undertaking are as follows: 1. Separate identity: Every business undertaking has a separate identity. It has a distinct name and separate existence. Its assets and...
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...the main users of accounting information and understand their information needs Distinguish between management accounting and financial accounting List the main types of business ownership and outline their characteristics Summarize the advantages and disadvantages of each type of business ownership p 2 Panagiotis Dontis Charitos WBS, 2013-14 IN TODAY’S LECTURE... Topics Differences between economics, accounting and finance Importance of financial information Users of accounting information and their information needs Differences between management accounting and financial accounting i Main types of business ownership Characteristics Advantages vs. disadvantages 3 Panagiotis Dontis Charitos WBS, 2013-14 ECONOMICS - FINANCE – ACCOUNTING Economics is a social science Study the production, consumption and distribution of services or goods Explain how economies work and how do different economies interact Finance is a subset/tool of economics that studies the financial markets Personal finance, corporate finance, state finance Accounting is an essential part of finance and economics Precise recording, reporting and assessment of financial deals and transactions of a business Preparation of statements or declarations concerning assets, liabilities, and outcomes of operations of a business 4 Panagiotis Dontis Charitos WBS, 2013-14 ECONOMICS - FINANCE – ACCOUNTING Accounting Finance Economics 5 Panagiotis Dontis Charitos WBS, 2013-14 ...
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...INTRODUCTION TO COMPANY A company can be defined as a group of persons associated together for the purpose of attaining a common object, social or economic. Normally it is formed to carry on business with a view to earn profit. Also a company can be defined as an association of many persons who contribute money or money’s worth to a common stock and employ it in some trade or business and who share the profit and loss therefore. Characteristics of the Company 1: Artificial Legal person. A company is an artificial because it is a creation of law. It does not take birth like a natural person but comes into existence through law. It has to act through a board of directors elected by shareholders. The board of directors are the brain and the only brain of the company which is the body of the company and the company can and does act only through them. 2: Common seal. A company being an artificial person can not sign documents. The law therefore has provided for the use of a common seal with the name of the company engraved on it as a substitute for its signature. No document issued by the company shall be binding on it unless it bears the common seal which is duly witnessed by at least two directors of the company. 3: Transferability of shares. Members of public limited company are free to transfer the shares held by them to anybody. Shares can be sold and purchased through the stock exchange. However in a private company such transfer may be restricted by the...
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...Proprietorship A sole proprietorship refers to a form of organization owned by a single individual. In this business, a single person makes all the decisions and does not have to engage a legal department to approve contracts. The owner of such a business can only use personal funds even though he or she may have separate checking and savings accounts for the business. The first characteristic of this form of business enterprise is liability. A sole proprietor suffers from unlimited liability. The owner becomes liable personally for all the obligations and debts of the business. The second characteristic is income taxes. Businesses pay federal income tax just like individuals. In a sole proprietorship, the owner pays income tax only once on the business income, which he or she reports on their personal income form. The third characteristic is control. In a sole proprietorship, the owner makes all the decisions concerning the business. In this business, the owner does not have to grant control to other people. The fourth characteristic is profit retention. If a sole proprietorship makes profits, the money belongs exclusively to the owner. The reason is that the owner and the business are one. The fifth is location. The owner can move or expand the business to a different state without consulting anybody. This is because the owner is the sole decision maker. The sixth characteristic is convenience or burden. The owner makes sure that the business complies with all meeting, reporting, and...
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...There are many legal forms of businesses that can be selected when a new business is being established, or a previously established business is considering changing legal form. These legal forms of business each have innate advantages and disadvantages related to legal liability, taxes, continuity, and control. The legal forms of business include: sole proprietorship, general partnership, limited partnership, C-corporation, S-corporation, and Limited Liability Company. Other forms of business include: family limited partnership, professional partnership, professional corporation, and personal services corporation, but for the purposes of this document we will include only the most common and appropriate. We'll discuss the characteristics of each of these legal forms of business below. Sole Proprietorship: Sole Proprietorship is the most common form of business in the United States. This is most likely due to the ease with which this form of business can be established. In the United States more than 17 million companies are operated under the form of sole proprietor, this equates to approximately 73 percent of all businesses in this country. Sole Proprietorship is an unincorporated form of business which can be established simply and with very few legal formalities. Local permits and licensing are all that would be required in order to establish a sole proprietorship, unless the business intended to operate under a name other than that of its owner. A sole proprietorship can...
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...There are many different types of business forms for your company to convert to. Below I will discuss the six types, their characteristics, advantages and disadvantages. I have concluded that there is one piece of generalized advice I can give for all of these types, and that is preparation for all owners involved, no matter the role. In the event of a death, or a decision to leave the business, you should make sure that at the forming of the business, that everything is in order for all parties involved and the smooth continuation of said business. Running a business can be an exciting endeavor, but I would recommend to anyone before they start, to have everything legally in order for all the different kinds of situations you can find yourself in. Sole Proprietorship- The simplest form of business, a sole proprietorship is the most common form of business in our country. Be it because it can be managed by a single person; or perhaps it’s the lack of agreements and formalities needed for the business to run, sole proprietorships are able to operate on a small scale and responsibilities fall on only one person. In a sole proprietorship, only one person is needed for the capital and credit to start the business, and possibly that’s why we American Dreamers have turned it into the most common form of business used in this great country. What distinguishes this form from the rest, is the unshared responsibility of the owner. Characteristics of a sole proprietorship, to be considered...
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...wishes to start their own successful business, there are a lot of important factors to be considered in order for that to happen. The main factor is how the business is intended to be conducted, and characteristics such as liability, taxation, continuity, profit retention and sharing, and the conveniences and burdens associated with the business. It is important for a potential business owner or owners to be educated on the different types of business organizations and rules and regulations involved in order to select the entity that best meets their business needs. Sole Proprietorship The first and most common form of business organizational structure is known as a sole proprietorship. Not only is it the most common, but it is also the simplest form of business organizational structure to establish. The primary characteristic of a sole proprietorship is that it is simply owned and operated by one person. When operating a business as a sole proprietor, the business also operates under the name of the person who is considered the owner of the business. If one were to declare an actual name for the business other than that of the owner’s name, then the business would include the term “Doing Business As,” or simply, D.B.A. An example of this would be, John Doe D.B.A. John’s Landscaping Service. This way, one can see that it is John Doe who is the sole proprietor, but also chooses to use John’s Landscaping Service as an official name for the business. In determining if a sole proprietorship...
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...both refer to the same thing and focus on attempts to differentiate goods and services. This quest is far from straightforward. Since the early eighteenth century academics and scholars from different domains have attempted to define these terms explicitly (Say 1803; Levitt 1981; Hill 1999; Gadrey 2000). In this chapter we will attempt to illustrate their findings in order to provide some background to the debate. 2.2 Goods In the eighteenth century Adam Smith (1776) stated that goods have exchangeable value and so a characteristic of a good is that its ownership rights can be established and exchanged. Goods can be considered as embodying specialised G. Parry (*) Bristol Business School, University of the West of England, BS16 1QY e-mail: glenn.parry@uwe.ac.uk M. Macintyre et al. (eds.), Service Design and Delivery, Service Science: Research and Innovations in the Service Economy, DOI 10.1007/978-1-4419-8321-3_2, © Springer Science+Business Media, LLC 2011 19 20 G. Parry et...
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...Forms of Business Organization Forms of Business Organization Have you ever imagined who commences the required capital, takes the accountability of arranging assets and other resources, operates them into practice, and controls and coordinates the operation to earn desired profits? If you search around, you will find a manufacturing business owned and operated by a single individual, who executes all these operations. It is significant for business owner(s) and manager(s) to comprehend the legal environment, in which their business(s) operate, not merely with regard to their own businesses however also as regards to other companies with whom they are doing business. In this context, there are six forms of business organizations, which are discussed below: a. Sole Proprietorship • Control Sole proprietorship is also termed as a sole trader. It is a form of business, which is owned and controlled by single individual and is the simplest form of business organization. The single owner of business has entire ownership and control over the assets and capital invested in the business and he or she is individually responsible (subject to some restrictions) for the expenses and liabilities of the business. • Liability A different advantage, nonetheless, is that the proprietor of this business form is responsible for all the business liabilities. Therefore, if a sole owner business undergo into financial crisis, creditors can originate lawsuits against the sole proprietor...
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...Describe the characteristics of the four basic forms of business ownership. A sole proprietorship is a business that is owned, and usually managed, by a single person. A partnership is a voluntary arrangement under which two or more people act as co-owners of a business for profit. A corporation is a legal entity created by filing a document with a state agency also known as the articles of incorporation. A corporation is considered to be a separate and distinct from its owners, who have a limited liability for the debts of their company. A limited liability company is a relatively new form of business ownership that, like a corporation, offers limited liability to its owners. However, LLCs offer more flexibility in tax treatment and simpler operating requirements. Discuss the advantages and disadvantages of a sole proprietorship A sole proprietorship is the simplest and least expensive form of ownership to establish. It offers the single owner the flexibility of running the business without having to seek the approval of other owners. If the business is successful, the sole proprietor retains all the profit. The earnings of a sole proprietorship are taxed only as income of the owner with no separate tax levied on the business itself. A key disadvantage of a sole proprietorship is that the single owner has unlimited liability for the debts of the business. The sole owner also must often work long hours and assume heavy responsibilities. Sole proprietorships as normally have...
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...Forms of Business Organization Forms of Business Organization Bruce J. Williams- ID# 000425916 Legal Issues in Business Organizations (LT1) Task 1 By Bruce J. Williams- ID# 000425916 Legal Issues in Business Organizations (LT1) Task 1 By Forms of Business organization There are seven characteristics used to determine a business organization; Liability, Income taxes, Longevity or continuity of the organization, Control over decision making, Profit retension, Expansion/ Location, and Compliance/Convenience/Burden Sole Proprietorship The sole proprietorship is the simplest form of business it is not a legal entity. It is best described as one person who owning a business and is personally responsible for the business debts. There is unlimited and unshared finanicial liability in a sole proprietorship. The assets * and liabilities whether it be business or personal are not differenciated. * A sole priprietorship and the business is taxed as a single unit. A 1040 form is filed * with a schedule C which shows a profit or loss. Any income from a sole proprietor * business are personal profit. It is a pass through taxation, there is not a seporate * federal income tax to report. * The longevity of the sole proprietor is a disadvantage because when the sole proprietor * dies the business also dies and there is no longer an income. The business ceases to * exist without an option to leave an heir. * The sole proprietorship...
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...do business; especially big business. Generally speaking, corporate governance deals with interaction and relationship between business management, board of director, shareholders, and other stakeholders in the business (Abor and Adjasi, 2007). Quality and existence of the business could be determined by well-implemented corporate governance. In the practice, good corporate governance is an issue of big businesses, not for small medium enterprises (SMEs). But the fact said, SMEs contributed about more than 90% of the economic development. It is contradictory with the other fact that most SMEs could only last for ten years, before they went bankrupt. Most of the studies about corporate governance focused more on the implication of corporate governance in the big businesses (Memili, 2011; Culasso et al., 2012). There are still relatively less researches talking about corporate governance’s implementation in SMEs comparing to in the big ones (Johannison dan Huse, 2000; van den Heuvel et al., 2006). Therefore, this research aims to study the implementations of corporate governance in SMEs, and specifically comparing those implementations in family business and in nonfamily business. Aspects that would be used in analyzing the implementation are five aspects contained in Indonesia Code of Good Corporate Governance 2006, which are transparency, accountability, responsibility, independency, and fairness. To strengthen the analysis, basic characteristics of both type of business would...
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